QUITO, Dec 22 (Reuters) - The government of Ecuador obtained a discount of at least 18 percent on compensation required by a World Bank tribunal for seizing Occidental Petroleum Corp’s assets, President Rafael Correa said, adding that negotiations were ongoing.
In 2012, the International Center for Settlement of Investment Disputes (ICSID) awarded Occidental $1.77 billion. An ICSID tribunal then cut the award by 40 percent in November and the negotiations appear to have reduced that amount by a further 18 percent.
“We are negotiating very hard and have obtained a discount of at least 18 percent of the payment. This may increase,” Correa said in the coastal province of Guayas.
“But in truth we are going to pay 30 percent less,” he added, explaining that the percentage includes some tax disputes and labor liabilities that Occidental has pending in the country.
The discounts would come in addition to the 40 percent reduction announced earlier this year.
Ecuador is requesting a “comprehensive agreement” to finalize all outstanding issues between the two parties.
“The oil company wants to impose a clause that leaves the door open to continue suing the country and that is unacceptable,” said Correa.
Reuters was not immediately able to obtain comment from Occidental.
Ecuador seized the field known as Block 15 from Occidental in 2006, arguing that its sale to Andes Petroleum had been carried out without government consent.
At the time of the contract termination, Occidental was Ecuador’s largest oil investor, extracting around 100,000 barrels of oil per day. (Reporting by Alexandra Valencia; Writing by Girish Gupta; Editing by Jeffrey Benkoe)