Ecuador reaches agreement with Occidental
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Ecuador reaches agreement with Occidental calling for return of US$100 million in taxes
The Associated Press
Published: April 16, 2008
QUITO, Ecuador: Ecuador has settled a dispute with the U.S. oil company Occidental and will return US$100 million (€63 million) in taxes, the energy minister said Wednesday.
But another dispute with foreign investors appeared to be brewing: members of the assembly writing a new constitution said it will probably cancel most of the country's mining concessions.
The government had canceled the contract of California-based Occidental Petroleum Corp. due to the dispute over value-added tax payments. Occidental said it was due a US$171 million (€108 million) refund.
Energy Minister Galo Chiriboga told a news conference on Wednesday that the settlement on a US$100 million (€63 million) payment was a success for Ecuador.
The agreement was reached March 31 within the framework of the World Bank's International Center for Settlement of Investment Disputes, said Attorney General Xavier Garaicoa, who also attended the news conference.
Occidental operated in Ecuador from 1999 to 2006, when the previous government unilaterally ended its operating agreement, accusing the company of violating its contract.
In a separate arbitration claim, Occidental is seeking US$1 billion (€630 million) in damages, alleging its property was confiscated illegally.
In another development, three members of the government majority that controls an assembly writing a new constitution said Wednesday that the body was close to approving a decree that would cancel 80 percent of Ecuador's mining concessions.
Assemblywoman Rossana Alvarado said the objective is "to prevent the abuses that have been made in mining in this country."
The decree has been approved in a commission and delivered to the body's president, who is expected to bring it up for a vote later this week, she said.
The proposed decree would cancel 3,100 of the country's 4,112 concessions and suspend another 1,220 that are in the process of being registered.
Assemblywoman Betty Tola, also a member of the majority, said only about 7 percent of concessions are actually being exploited.
The proposed decree would end all concessions that showed no actual investment by the end of last year.
Companies not affected would still have to renegotiate their contracts within a new mining law that is being prepared. |
