ChevronTexaco Conducted Effective Cleanup in Ecuador

ChevronTexaco and its subsidiary Texaco Petroleum Company ("TexPet") announced that they have completed an inspection of all of the oil production sites that it had cleaned as part of its agreement with the Ecuadorian government -- and which are subject to upcoming judicial inspection -- and found each to be in good condition and cleaned in accordance with government requirements. The inspection was performed in connection to the lawsuit filed in July 2003 by residents of the Oriente seeking environmental relief and remediation arising from oil production activities in the region. TexPet exited all oil producing activities in the country in 1992.

As part of the inspection process, a team of environmental experts commissioned by ChevronTexaco, including representatives from URS Corporation (an internationally recognized firm specializing in environmental remediation), conducted inspections of the sites cleaned by TexPet,* and found no evidence of hydrocarbon contamination. Such findings support the positions that ChevronTexaco has asserted in the Superior Court in Nuevo Loja, which is hearing the case.

During the course of the recent inspections, the environmental experts also observed visible evidence of contamination at locations that were outside the TexPet's area of responsibility, or that are associated with ongoing operations managed by PetroEcuador.

Rodrigo Perez, legal representative of Texaco Petroleum Company, summarized the findings by saying, "Our team of experts re-visited all of the sites cleaned up by TexPet that will be similarly be inspected by the court. What they concluded was that TexPet carried out an effective cleanup program in full accordance with its obligations to the Ecuadorian government. Any hydrocarbons or pollution found were either outside of the area of TexPet's responsibility as directed by the government, or clearly the result of the continuing oil operations of PetroEcuador and oil activities occurring long after the company stopped operating in Ecuador in 1990."

Perez continued, "These findings underscore the truth behind what we've been saying all along: TexPet acted responsibly, in accordance with existing environmental laws and practices and conducted a thorough cleanup of its share of sites. The Ecuadorian government and PetroEcuador verified that we had fulfilled our responsibilities when they approved the cleanup and released us from all future liabilities in 1998, and now we have further proof confirming these facts.

"At the same time," Perez added, "We find it disturbing that plaintiffs' American attorneys have failed to address -- and have in fact, completely ignored -- PetroEcuador's cleanup obligations even though the state-owned oil company, as a Consortium member, was responsible for its share of required cleanup and has been the sole operator in the former Consortium oil fields for the past 14 years. Plaintiffs in this case make no effort to distinguish between environmental damage alleged to have taken place during TexPet's participation in the Consortium with PetroEcuador and potential damage from ongoing operations by PetroEcuador and others over the past 14 years. In the context of this lawsuit, plaintiffs have no justification to simply point at a pit and blame TexPet. We hope that a thorough and honest evaluation of the facts will help focus attention on this important matter."

The findings from the site visits comes in addition to facts already documented by the company in its filings about the case:

Internationally Recognized Environmental Firms Found that Texaco Acted Responsibly and in Accordance with Internationally Accepted Operating Practices

  • Two globally accredited environmental auditing firms HBT AGRA Ltd. and Fugro-McClelland (hired by the government of Ecuador and TexPet respectively) concluded in 1993 that all exploration and production activities had been made in strict accordance with existing environmental laws, using globally accepted operating practices, and that any petroleum contamination was minimal and focused.
  • The Fugro-McLelland audit also concluded that most of the hydrocarbon contamination found at the wellheads occurred post 1990 -- after TexPet transferred its operations to PetroEcuador. According to the final report, fully 70% of the hydrocarbon contamination in the production installations, and 50% of the soil hydrocarbon contamination in the drilling platforms and of the pools "… was attributable to the operations of PetroAmazonas (PetroEcuador's subsidiary) from 1990 to 1992."

  • TexPet Spent $40 Million to Clean Up its Share of Sites

  • Starting in 1995 and ending in 1998, TexPet fulfilled its obligations and cleaned up all of the sites it was responsible for under its agreement with the government of Ecuador and PetroEcuador. This included the following activities:
  • Closed and remediated 161 well pits and 7 overflow areas
  • Plugged and abandoned 18 wells
  • Remediated soil at 36 sites
  • Installed 3 produced water treatment and reinjection systems, and provided PetroEcuador with equipment for 10 additional stations
  • Designed 3 oil containment systems at storage facilities
  • Conducted extensive replanting of native vegetation at the cleaned sites.

  • Texaco Petroleum also funded social and health programs throughout the region of operations, such as medical dispensaries and sewage and potable water systems.
  • The scope of work and techniques used to clean up these sites were completely pre-approved by the Ecuadorian government through the Subsecretaria de Medio Ambiente of the Ministry of Energy and Mines, and by representatives of PetroEcuador. All of the remediation activities were conducted in accordance with the U.S. Environmental Protection Agency (USEPA), American Petroleum Institute (API), and other international standards, and hydrocarbon levels at each site were independently verified by the Universidad Central de Ecuador before acceptance.

  • While TexPet Has Confirmed Clean Up of the Agreed Upon Oil Sites, PetroEcuador Has Not Documented Clean Up Efforts Performed on Its Remaining Share

  • According to its agreement with the Ecuadorian government, TexPet was responsible for site cleanup in equal measure to its minority participation in the Consortium. The rest of the cleanup effort, corresponding to its majority ownership of the consortium, is the exclusive obligation of PetroEcuador.
  • Although initial audit reports estimated determined that $13 million USD would be required to clean up all of the consortium sites, TexPet ultimately expended $40 million USD in the remediation program to clean up its fair share.
  • PetroEcuador has yet to deliver a full and public accounting of what it has done to clean up its share of the sites.

  • Both The Government and PetroEcuador Freed TexPet From All Environmental Liability

  • On September 30, 1998, the government of Ecuador and the President of PetroEcuador signed the "Final Act of Final Liberation of Claims and Equipment Delivery," recognizing that TexPet had fulfilled all of its cleanup obligations and releasing TexPet from all future liabilities. All further cleanup is the exclusive responsibility of PetroEcuador in accordance with the joint operating agreement between TexPet and PetroEcuador and existing environmental laws.