Correa Rejects ICSID Jurisdiction in Oxy Claim
Ecuador's president-elect Rafael Correa does not recognize the authority of the International Center for Settlement of Investment Disputes (ICSID) to preside over US oil company Occidental's (NYSE: OXY) claim against the government.
"[Correa's] main objection is that Ecuador has never agreed, at any moment, to submit itself to ICSID jurisdiction," according to a statement on Correa's official website.
The statement added the disputes "are the exclusive jurisdiction of Ecuadorian courts."
Oxy filed a case with ICSID over the government's mid-May cancellation of its block 15 contract.
Correa disagrees with Ecuador's attorney general naming an arbiter to represent the country in the ICSID case. The move gives weight to Oxy's claims, according to Correa.
Ecuador cancelled Oxy's contract on the block, alleging the US company transferred a 40% stake in block 15 to Canadian oil firm EnCana (NYSE: ENC) in 2000 without government permission. The government also claims Oxy overproduced some wells and did not comply with the block's investment plan.
Block 15 produces roughly 100,000b/d oil, or roughly a third of the country's output.
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