(MENAFN - AFP) Ecuador said Saturday it will fight to avoid paying a fine to Occidental Petroleum as compensation for canceling a contract with the US oil giant.
"We will continue fighting to not pay a penny to this abusive transnational corporation," said President Rafael Correa, accusing the company of "wanting to deliberately defraud the state."
Earlier this month, the International Center for Settlement of Investment Disputes, which is a branch of the World Bank, released a ruling declaring Quito must pay 1.77 billion plus interest to Occidental Petroleum as compensation for canceling a contract with the company.
Including taxes, the amount is now 2.3 billion, Correa said Saturday.
In May 2006, Occidental Petroleum, or Oxy, sued Ecuador for 3.37 billion at the ICSID a day after the country announced the cancelation of a contract under which the company could extract 100,000 barrels of oil per day from the South American nation's Amazon basin region.
Ecuador was angry that Oxy had sold 40 percent of its shares to the Canadian company Encana without first advising the Quito government.
Correa said that by selling part of its shares without notice, Oxy was "defrauding the Ecuadoran state and openly violating the law and the contract."