11 Mar 2005

Court Observes Evidence of PETROECUADOR Pipeline Breaks and Spills During Judicial Inspection of Shushufindi-8

NUEVA LOJA, Ecuador, March 11, 2005 - Yesterday the Judicial Inspection took place at the well site Shushufindi-8, around which during the last 20 years several industrial installations have been built and PETROECUADOR has had several pipeline breaks and oil spills. Although the industrial facilties currently located near the site are unrelated to Texaco Petroleum Company (Texpet) or its former minority share in the consortium with PETROECUADOR, they have affected the environmental conditions at Shushufindi-8.

Adolfo Callejas, attorney for ChevronTexaco, denounced as false the several claims made by the plaintiffs┬┤ lawyers, emphasizing that:

  • ChevronTexaco is not responsible for widespread deforestation in the Amazon Region. Callejas pointed out that according to two environmental audits only 2,600 hectares were cleared during the period of consortium operations. This is less than one-half of one percent of the entire Ecuadorian Amazon Basin.
  • ChevronTexaco is not responsible for any environmental damages within the area of the former consortium operations. He emphasized that Texpet fully complied with its share of the environmental remediation work. PETROECUADOR has not performed a comprehensive remediation of the areas it is responsible for. The environmental condition of the area has since been affected by other industries and factors that have modified the environmental condition of the Amazon region during the last 12 years.

Shushufindi-8 is surrounded by industrial facilities: a natural gas plant and a refinery, both of which are owned by the Government of Ecuador; a petroleum installation operated by the oil company Repsol-YPF, and a privately'operated contaminated waste disposal facility. Along the eastern border of the well site several sections of broken and cut pipelines, which are part of the flow lines that carry oil to the Production Station Shushufindi Central, offered evidence of previous PETROECUADOR oil spills at the site.

Highlights:

  • During the tour around Shushufindi-8 the Court saw a poorly closed oil well - work that was done by PETROECUADOR in September 2004, 14 years after the state-owned oil company assumed sole ownership and operatorship of the former consortium. A ChevronTexaco attorney pointed out that the date welded onto the closed well contradicts the plaintiffs' claims that any environmental damage existing in the area can only be attributable to Texpet.
  • Callejas also pointed out PETROECUADOR┬┤s responsibility for the environmental conditions at Shushufindi-8, where according to official information from PETROECUADOR several spills had occurred (December 30, 1998; January 9, 1999; February 18, 1999), after Texpet concluded its remediation work. Callejas reminded the Court that in 1998 the Ecuadorian government declared that Texpet had fulfilled its part of the environmental contract, and the government liberated the company of any responsibility for environmental conditions within the whole concession area. In this way the Ecuadorian Government not only recognized that Texpet had fulfilled its environmental responsibilities, but the government also accepted its own exclusive responsibility for the environmental conditions of the oil facilities.

ChevronTexaco is defending itself in a lawsuit promoted by American lawyers, who allege environmental damages and health damages produced by Texpet operations, which kept a minority share with PETROECUADOR in an Oil Consortium. Texpet stop operating in 1990 and concluded its oil activities in Ecuador in 1992, meanwhile PETROECUADOR has been the exclusive owner and operator of the Consortium Facilities during the last 12 years. The Inspection conducted yesterday was the twentieth of a series of 122 inspections, which the Court started on August 2004.

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