Perenco Negotiates with Ecuador Government

Wednesday, July 08, 2009

Perenco Ecuador Limited has called on the Government of Ecuador to cease efforts to sell oil seized from Blocks 7 and 21 in defiance of orders by international arbitration tribunals, and instead to seek a negotiated solution to the dispute concerning the applicability of Law 42. Perenco Ecuador is the Operator of the two blocks in question.  On February 19, 2009, the Republic of Ecuador and its oil company, Empresa Estatal Petroleos del Ecuador ("Petroecuador"), commenced a coercive process to collect from Perenco approximately $327 million they claimed were due under a 2006 Ecuadorian law ("Law 42") by which the government asserts a right to 99% of the oil revenues above an arbitrary "reference price."  In March 2009, Petroecuador began seizing crude oil produced by Perenco and its consortium partner, Burlington Resources Oriente Ltd. ("Burlington"), from Blocks 7 and 21 in Ecuador to satisfy the alleged Law 42 debt. 

However, on May 8, 2009, a three-member international arbitration tribunal constituted under the auspices of the International Center for the Settlement of Investment Disputes ("ICSID") unanimously ordered that the Republic of Ecuador and Petroecuador be restrained from "instituting or further pursuing any action" - including oil seizures - "to collect from Perenco any payments [they] claim are owed… pursuant to Law 42."  The tribunal made clear that such orders "are binding on the party to which they are directed" and that the parties "are under an international obligation to comply." On June 29, 2009, a different international arbitration tribunal in a separate ICSID arbitration commenced by Burlington issued a similar provisional measures order.

Despite these ICSID tribunal orders, the Ecuadorian Government has twice attempted to auction the crude oil it has seized from Perenco and Burlington.  Petroecuador first attempted to sell the seized oil at an auction in May, but no buyers materialized.  On July 3, Petroecuador convened a second auction, but the only bidder was Petroecuador itself.  Petroecuador has recently announced an intention to conduct a third auction.

Maritime Reporter March 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Ship as Lifeboat Concept Disputed by ICV

A recent meeting at the National Transportation Safety Board in Washington, D.C. (attended by International Cruise Victims (ICV) Board representatives) discussed

McDermott Elect G.P. Luquette Board Chairman

Provider of integrated engineering, procurement, construction and installation (EPCI) services for upstream field developments worldwide, McDermott International, say that Gary P.

Ill-Considered Energy Policies Threaten US Navy: Report

The United States government has pursued energy policies based on “the mistaken belief in the unproven science that claims carbon dioxide (CO2) emissions

Offshore

BP Gulf Spill Trial Set For January

The high-stakes penalty phase of BP's trial over its role in the 2010 U.S. Gulf of Mexico oil spill will start next January, court officials said on Tuesday,

North Sea Maintenance Offsets Lack of Sales to Asia

North Sea Forties crude differentials were unchanged on Tuesday in light trade, supported by upcoming North Sea maintenance, but the forward curve weakened due

Saipem: A Fleet Grows in Brazil

As some pre-salt plays begin production, a wide range of subsea infrastructure is being built, with O&G transportation pipeline grids being one of the vital downstream systems.

Fuels & Lubes

Ill-Considered Energy Policies Threaten US Navy: Report

The United States government has pursued energy policies based on “the mistaken belief in the unproven science that claims carbon dioxide (CO2) emissions

U.S. Supreme Court Declines Exxon Mobil Appeal

The U.S. Supreme Court on Monday declined to review a ruling against Exxon Mobil Corp that ordered the company to pay $105 million in damages for polluting New

Japan LNG Imports Hit Record Levels

Japan imported record volumes of liquefied natural gas (LNG) and thermal coal in the fiscal year ended in March, as the country's  shutdowns of nuclear stations

Government Update

UK Subsidises 8 Renewable Energy Contracts

The British government on Wednesday awarded investment contracts under a new subsidy regime to eight renewable energy projects, including five offshore wind farms and three biomass plants.

China's Seizure of Japanese Ship has Pre-WWII Roots

It all began with a pre-World War II contract between China's then "ship king" and a Japanese company to lease two Chinese freighters. When the one-year lease was up in 1937,

ISS to Support Petrobras Expansion

Inchcape Shipping Services (ISS)  has had its port agency and tanker husbandry services contract significantly enlarged by Petrobras.   The Brazilian government-owned energy giant,

 
 
Maritime Standards Navigation Offshore Oil Port Authority Salvage Ship Electronics Ship Repair Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1404 sec (7 req/sec)