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Baseefa Ltd

Chevron to appeal Argentine unit asset freeze

11 January 2013

The Argentine unit of Chevron said it will appeal an Argentine judge's order freezing its assets in the country. The embargo was issued in November 2012 at the request of lawyers representing Ecuadorian plaintiffs who are sueing the US major over the dumping of toxic waste in the Amazon rainforest. 

Ecuador is seeking $19bn from Chevron for pollution in the Lago Agrio region
Ecuador is seeking $19bn from Chevron for pollution in the Lago Agrio region

The plaintiffs want to recover US$19bn in damages related to the original lawsuit in Ecuador.

Chevron has at least $2 billion worth of assets in Argentina. The seizure includes 100% of Chevron's capital and dividends in Argentina, its entire stake in pipeline operator Oleoductos del Valle SA, 40% of Chevron's oil sales to Argentine refineries, and 40% of the money Chevron has deposited in Argentine banks, according to the lawyer representing indigenous communities in Ecuador who brought the lawsuit.

Chevron also signed a deal with YPF in December 2012 to help develop Argentine shale gas resources, which could be stillborn if the asset freeze is not lifted. 

An Ecuadorian court awarded the damages last year, but since Chevron has few assets in the country, plaintiffs are looking elsewhere to recoup the damages. Similar lawsuits have also been filed in Brazil and Canada.

In early October, Chevron lost a bid to have the US Supreme Court block enforcement of the ruling.

Chevron’s Argentine subsidiary called the Ecuadorian ruling a "fraud," adding that the lawsuit involves its parent company, which is outside of the Argentine court's jurisdiction.

"The Ecuador judgment is a product of bribery, fraud, and it is illegitimate. The company does not believe that the Ecuador judgment is enforceable in any court that observes the rule of law," Chevron said in a statement on its website.

The plaintiffs claim that Texaco, which Chevron acquired in 2001, polluted Ecuador's Lago Agrio region in the 1970s and 80s, affecting the living conditions of 30,000 inhabitants.

Chevron says that in 1998, on leaving Ecuador, Texaco carried out a full remediation programme which was certified as complete by the Ecuadorian government, and the company was granted a full release from all further claims.




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