(Reuters) - A World Bank panel has ordered Ecuador to pay $380 million in damages to a subsidiary of U.S.-based ConocoPhillips for unlawfully expropriating the company’s oil investments.
The settlement is related to an ongoing case where the energy company had been seeking compensation related to confiscation of assets.
The subsidiary, Burlington Resources, had stakes in two blocks operated by French oil and gas company Perenco that were taken over by Ecuadorean President Rafael Correa’s government in 2009.
Ecuador had said that the consortium abandoned the area illegally in a dispute over taxes, whereas the companies argued that the Correa government expropriated their assets.
“The Tribunal’s decision on damages sends a clear message that governments cannot expropriate investments without fair compensation,” Janet Carrig, senior vice president of ConocoPhillips’s legal and general counsel, said in a statement.
ConocoPhillips said it would strongly defend any application seeking to annul the settlement.
The timing and manner of collecting the amount are yet to be determined, the world’s largest independent exploration and production company said.
In a separate decision, the tribunal ordered that Ecuador was entitled to $42 million for limited environmental and infrastructure impacts associated with the operations of the consortium comprising Burlington and Perenco.
Reporting by Sweta Singh in Bengaluru