Argentine court revokes $19bn Chevron asset freeze

05 June 2013 23:35  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Argentina’s Supreme Court has revoked a freeze on up to $19bn (€14bn) worth of assets held by Chevron’s subsidiary company in Argentina, the country’s Judicial Information Centre (ICJ) said on Wednesday.

Argentine judge Adrian Elcuj Miranda froze Chevron’s Argentine assets last year following a February 2011 verdict by an Ecuadorian judge that found the company guilty of dumping billions of gallons of toxic waste into the Ecuadorian Amazon.

The Ecuadorian court ordered Chevron to pay $18.2bn – later increased to $19bn – in compensation and clear-up costs. Chevron has since vehemently contested the verdict.

At the time, Miranda cited an international treaty signed by Argentina and Ecuador as the basis for his decision.

In a five-page ruling, made available by the ICJ, the country’s Supreme Court agreed to lift the freeze, stating that Chevron’s Argentine subsidiary should be treated as a separate entity to its parent company.

The plaintiffs suffered a similar setback in May after an Ontario judge dismissed a lawsuit to have the $19bn judgement enforced in Canada.

The Supreme Court’s ruling means the US oil giant can press ahead with a $1.5bn deal struck with Argentina’s state-run oil company YPF to explore the Vaca Muerta shale formation in Neuquen, in western Argentina.

According to a statement by YPF in May, Chevron agreed to invest in the Loma La Lata Norte and Loma Campana areas of Vaca Muerta.

The definitive agreement between the two parties will be signed off next month, YPF said.

Argentina is thought to have the world’s third largest shale gas reserves after the US and China, with an estimated 774,000 billion cubic feet (bcf) of recoverable gas, according to the US Energy Information Administration (EIA).

YPF is keen to partner with companies to develop this potential and by doing so reduce the country’s dependence on imported fuels.

However, following the expropriation of YPF from Spanish firm Repsol in 2012, potential partners have been cautious.

In March, YPF signed a memorandum of understanding with the Argentine subsidiary of petrochemical major Dow Chemical to develop the country’s shale reserves.

Under the terms of the agreement, the Argentine company and Dow would also work to identify new petrochemical projects, YPF said at the time.

($1 = €0.76)

By: Simon West

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