July 22, 2006
Chevron Responds to Allegations of Fraud: "Absolutely No Merit"
Quito, July 22, 2006- Chevron today issued a statement that there is "absolutely no merit" in the allegation of fraud made by attorneys for the Government of Ecuador relating to the 1998 agreement by the Government of Ecuador releasing Texaco Petroleum Company (a Chevron subsidiary) from all claims and obligations following Texaco's successful completion of an oil field remediation program.
The Government's attorneys made the allegation in a filing before the U.S. District Court in New York, U.S.A., where it is a defendant (along with Petroecuador) in a lawsuit brought by Chevron for breach of the 1998 agreement. Also at issue in that lawsuit and a related arbitration proceeding is Petroecuador's violation of its obligation to indemnify Chevron and Texaco for any claims related to Texaco's former role as oil field operator.
In the statement issued today, Chevron said:
"There is absolutely no merit in any allegation of fraud with respect to the 1995-1998 remediation program and subsequent releases by the Government of Ecuador.
"The scope of the remediation program—set forth in a March 23, 1995 agreement among Texaco Petroleum Company, the Government of Ecuador, and Petroecuador—was based on an exhaustive and transparent negotiation process which took into consideration the findings and recommendations of two independent environmental audits as well as criteria and methodology developed by the Government experts."
"As Texaco carried out this remediation program, the Government of Ecuador inspected every site remediated by Texaco and, with the guidance of Ecuadorian scientists, affirmed that the remediation was effective and complete, having met the specifications set forth in the 1995 agreement as well as all legal requirements and regulations. These approvals of the remediation work were given by multiple government agencies and were in turn ratified by the Ministry of Energy and Mines and other segments of the Government."
"No evidence presented to the Superior Court in the ongoing trial against Chevron, or any other evidence, supports the allegation that Texaco fraudulently obtained these Government approvals of the remediation work. Moreover, the overwhelming body of evidence presented to the Superior Court in the ongoing trial against Chevron shows conclusively that the remediation carried out by Texaco Petroleum Company was effective."
"We believe that, after the trial in March 2007, the federal court in New York will find that the allegations of fraud are baseless and that the Government of Ecuador and Petroecuador are liable for violations of the contractual releases."
Back to top