Ecuador Court Expert Recommends Chevron Pay $8.3B to $16B

QUITO, April 2, 2008 (Dow Jones Newswires)

An independent expert has submitted a court report recommending that U.S. oil company Chevron Corp. (CVX) pay at least $8.3 billion, and maybe as much as $16 billion, in compensation for environmental damages in Ecuador, one of the plaintiffs' lawyers told Dow Jones Newswires on Wednesday.

The official report was submitted Tuesday to the court in Nueva Loja by expert Richard Cabrera, said lawyer Pablo Fajardo.

Fajardo said that, according to Cabrera's report, the environment damages are estimated at $8.3 billion, and that Texaco, which Chevron acquired in 2001, saved around $8 billion by scrimping on its clean-up efforts, including using poor technology and bad environmental practices.

The judge presiding over the case can choose to accept or reject partially or fully the findings of Cabrera's report. The judge also could name another expert.

Chevron is facing a lawsuit in Ecuador for Texaco's alleged contamination in the Amazon region of Lago Agrio. The company is accused of having used out-of-date technology that led to environmental damage. The complaint started in 1993 with a lawsuit in New York courts, which ruled that the case should be tried in Ecuador. In May 2003, several indigenous groups filed a lawsuit against the company in Lago Agrio, Nueva Loja.

Last year, President Rafael Correa during a visit to the area accused Chevron of contamination that he said was 30 times worse than the Exxon-Valdez oil spill in Alaska in 1989.

The company denies the allegations and said it had met all requirements for environmental clean-up that were agreed upon with Ecuadorean state oil company, Petroecuador, spending about $40 million. Chevron has also said that in 1998, the state oil company, Petroecuador, released the U.S.-based company from any liabilities regarding clean-up efforts.

Chevron has said several times that in the last 15 years, Petroecuador, which took over Texaco's assets, hasn't fulfilled its environmental obligations and its history of environmental neglect and poor-quality operations are very well documented.

Chevron has also said repeatedly the court case it is facing in Ecuador suffers from serious irregularities, as well as a lack of seriousness and impartiality, and that the Ecuadorean government has interfered in the legal proceedings.

The oil major's General Counsel, Charles James, told Dow Jones Newswires Tuesday that Chevron would appeal any ruling against it in Ecuadorean courts before seeking international arbitration, if necessary.

QUITO, April 2, 2008 (Dow Jones Newswires)