Ecuador seizure roils EnCana's China deal
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#1 Jun 10, 2006
Ecuador didn't confiscate neither nationalized any assets of OXY. This company broke and it abused the trust and hospitality that the people of Ecuador gave to Oxy when in the year 2000 sold 40% of the benefits of the Oil Contract that subscribed with Ecuador.
I CONTRACT will finish: 21.1.- For declaration expiration emitted by the Ministry of the Field
for the causal ones and under the procedure settled down in the articles seventy four
(74), seventy five (75) and seventy six (76) of the Law of Hydrocarbons, in that that will be applicable.
21.1.2.- To transfer any right and obligations of the contract, without authorization of the Ministry of the Field."
Occidental never got that authorization from the Goverment and Ecuador get notice of that sale just in the 2004´s.
#2 Jul 4, 2006
Unfortunately, the Ecuadorean government is made up in part of men who are simply gathering money to take with them when they move to the United States, and this country and its very innocent and often ignorant population will pay for their lack of foresight and their complete lack of concern for their people. The situation with Oxy did not happen the way it is written in the newspapers -- of course -- because the newspapers cannot write the truth if the government does not like it. The government gave verbal agreement to the deal that Oxy negotiated in 2000. Assets seized from Oxy absolutely were seized illegally, but in the end, Oxy really suffers very little damage; Oxy is still a wealthy, successful company, and the United States, which imports less than 1/2 of 1% of its oil from Ecuador and has been doing Ecuador a huge financial favor for years by allowing goods from Ecuador to be imported with low or no tariffs, is better off not doing business with such a corrupt government.
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