* ICSID says Ecuador expropriated Occidental's oil block
* Ecuador will appeal the ruling, says President Correa
Oct 5 The World Bank's arbitration center
(ICSID) has ordered Ecuador to pay nearly $1.77 billion in
damages to U.S.-based Occidental Petroleum for seizing
the company's assets in 2006, but the Andean country said it
would appeal the decision.
The Ecuadorean government decided to terminate Occidental
Petroleum's contract in May 2006, arguing that the company had
sold a stake in its operations without government consent.
"Claimants are awarded the amount of $1.769 billion," said
the award ruling posted on the website of the International
Center for Settlement of Investment Disputes, or ICSID.
It also ordered Ecuador to pay "pre-award interest on the
above amount at the rate of 4.188 percent per annum, compounded
annually from 16 May 2006 until the date of this award."
Occidental Petroleum, also known as Oxy, filed a request for
arbitration in July 2006.
The ruling said that Ecuador's seizure of an oil block
operated by Occidental was "tantamount to expropriation".
Ecuador's leftist President Rafael Correa said that the
Andean country would appeal the decision.
"We'll ask for it to be declared null and void. We're used
to confronting these abuses, these obstacles, and we'll continue
defending the integrity of the country," Correa told reporters.
Ecuador's attorney general Diego Garcia said earlier this
week that Occidental was seeking nearly $3.4 billion in damages
from the OPEC-member country. He said Ecuador was only willing
to pay up to $417 million to Occidental.
Ecuador is OPEC's smallest member and produces around
500,000 barrels of crude oil a day.
Before having its contract terminated, Occidental was
Ecuador's largest oil investor, extracting around 100,000
barrels of oil per day. The company's operations are now
controlled by state-run company Petroamazonas.