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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: CommanderCricket who wrote (123729)8/27/2009 6:36:34 PM
From: Elroy Jetson2 Recommendations  Read Replies (1) of 206097
 
The military leaders of Ecuador and their oil company Petroecuador paid Texaco a minority interest in the oil production in Ecuador in return for providing drilling and production services. This continued until 1990 when the military leadership of Ecuador terminated Texaco's interests.

After leaving in 1990 Texaco continued the the clean up of their area of operation to industry standards, spending another $40 million in the process. Petroecuador continued to operate after Texaco departed throughout Ecuador in a manner which was clearly far below industry standards and created a large environmental problem.

Chevron purchased Texaco in 2001 and the government of Ecuador had changed many times.

Parties in Ecuador filed a lawsuit demanding that Chevron pay for the clean up of all of Petroecuador's operations, both prior to 1990 and subsequent to 1990 when Texaco departed.

After investigating I understand Chevron offered to provide additional services in those areas Texaco operated to bring them up to Chevron's standards, but will not assume any responsibility for Petroecuador's subsequent or earlier sole operations. This offer was refused.

The current government of Ecuador has decided their best course of action will be to try to embarrass Chevron into paying for the problems created in Ecuador by Petroecuador after Texaco left.

In my estimation this publicity campaign will not affect Chevron's decision to do the right thing. Chevron routinely pays immense sums to right any damage they may be responsible for, including the responsibility of companies they have purchased, even when Chevron has no legal responsibility.

But Chevron also has routinely paid large amounts of money to defend against unjust claims, even when the costs of that defense are far larger than the false claim they are defending themselves against.

One example occurred when the Kern County Accessors revalued Chevron's properties on a basis which we did not feel was fair or legal. Chevron fought this in court and won. We knew going into court that Chevron's legal fees would be far more than the sum of the increased taxes over a twenty year period. In fact the bills from Pillsbury Madison and Sutro proved to be even larger than that, let alone the unfavorable publicity in Kern County.

You get a reputation if you always try to do the right thing. Honest people trust you and dishonest people will often be dissuaded by learning of your past conduct.
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