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Argentina Judge Slaps Embargo On Chevron Assets

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BUENOS AIRES - Ecuadorean indigenous groups have moved a step closer to collecting on a multi-billion dollar court award against Chevron Corp., after a judge embargoed up to $19 billion of the oil company's assets and receivables in Argentina, according to a lawyer involved in the case.

Enrique Bruchou, lead attorney for the Ecuadoreans in Argentina, valued Chevron's assets in Argentina at $2 billion.

Mr. Bruchou said the embargo will remain in place until the Ecuador award is paid off and applies to 100% of Chevron's capital in Argentina, 100% of dividends, all of Chevron's 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.

Last year, a court in Ecuador found Chevron liable for pollution in the Amazon and levied an $18.2 billion judgment against the company. That amount was later raised to $19 billion by an Ecuadorean judge.

Chevron doesn't have significant assets in Ecuador, but the plaintiffs have been trying to seize its assets in other countries to enforce settlement on the judgment.

The lawsuit in Argentina is the latest development in an almost 20-year legal dispute over claims that Texaco Inc., which Chevron bought in 2001, contaminated parts of Ecuador's Amazon region when it was operating in the country.

Chevron has repeatedly denied the claims and said the Ecuador judgement is the product of bribery and fraud.

Chevron said in an emailed statement that it hasn't been notified of a court ruling in Argentina.

"All operations in Argentina are conducted by subsidiaries that have nothing to do with the plaintiffs' fraud in Ecuador. The plaintiffs' lawyers have no legal right to embargo subsidiary assets in Argentina," the company said.

The start of litigation in Argentina comes just as the country's state oil company, YPF SA, is courting Chevron to help it explore for potentially massive, but as yet untapped, unconventional oil and gas resources.

In September, Chevron and YPF signed a memorandum of understanding to explore for unconventional energy in the South American nation.

Chevron's net production in Argentina in 2011 reached 26,000 barrels of crude oil a day and 4 million cubic feet of natural gas a day, according to data posted on the company's website; the site says that the company is the fourth largest producer of oil in Argentina. The San Ramon, Calif.-based oil giant also owns 14% of the Oleoductos del Valle S.A. pipeline system, which moves crude from western Argentina to the Buenos Aires region.

Chevron also has an information technology support center in Buenos Aires, which services its North American offices.

In June, lawyers for the Ecuadoreans filed a lawsuit in Brazil one month after they launched a similar suit in Canada.

"This process will continue in Asia, Oceania and Europe and we're working with the best law firms in those countries," Bruchou told reporters.

Ken Parks contributed to this story

Copyright (c) 2012 Dow Jones & Company, Inc.

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