Summary
Occidental Petroleum (OXY) reported on August 4, 2005, a significant development regarding its operations in Ecuador. Petroecuador, the state oil company, has formally requested the rescission of OXY's Participation Contract for Block 15. This action stems from allegations that OXY failed to obtain government approval for a farmout agreement executed in 2000, potentially violating the contract and Ecuadorian Hydrocarbons Law.
Key Highlights
- 1Petroecuador is seeking to rescind Occidental Petroleum's Participation Contract for Block 15 in Ecuador.
- 2The primary allegation involves the alleged failure to obtain government approval for a 2000 farmout agreement.
- 3The final decision on contract rescission rests with Ecuador's Minister of Energy and Mines.
- 4Occidental Petroleum maintains it has complied with all material obligations under the contract and Ecuadorian law.
- 5The company views any termination based on these allegations as an unfounded, unlawful expropriation.
- 6Occidental is pursuing a constructive dialogue and an amicable resolution with Ecuadorian authorities.