Ecuador pays $112 million award to Chevron

Ecuador has paid $112 million to energy company Chevron Corp over a four-decade-old contract dispute, even though it remains in disagreement, the head of the central bank has said.

A Hague arbitration court awarded the US company $96 million in 2011 in a dispute stemming from a 1973 deal that called for Texaco, later acquired by Chevron, to develop fields in exchange for selling oil to Ecuador at below-market rates.

Various appeals by Ecuador against the ruling failed.

“We have today paid around $112 million,” the central bank head Diego Martinez told a local radio station late on Friday.

That amount represented the award plus interest.

“We don’t agree with how these international mechanisms work ... however, we are respectful and we fulfill our international obligations,” Martinez added.

The payment comes as leftist President Rafael Correa’s government faces a cash crunch due to tumbling crude revenues in the Andean oil producer that is OPEC’s smallest member.

Ecuador also had to pay Occidental Petroleum Corp roughly about $980 million this year to compensate the company for seizing its oil field in 2006. (RTRS)