Ecuador says will pay $374 mn to oil company Perenco

Ecuador said Monday it would pay $374 million due to Anglo-French oil company Perenco under a settlement ordered in a dispute over profits.

Work was under way to figure out payment terms, the economy ministry said, after Perenco announced it had secured a freeze of all Luxembourg bank accounts used by Ecuador to make bond coupon payments.

Perenco filed suit over a decade ago against Ecuador for $1.42 billion, after the South American country increased from 50 percent to 99 percent its share of profits after an increase in the oil price.

In 2019, Perenco was awarded a settlement against Ecuador by the International Center for Investment Disputes (ICSID), an autonomous organ of the World Bank.

In a statement on Monday, Perenco said it had managed to freeze "bank accounts in Luxembourg from which payments are made on Ecuador's bond coupons."

This served, it said, "to highlight the risks the international investment community faces in any dealings with Ecuador."

The company added: "Unless and until Ecuador fulfils its obligations under the Washington Convention and its express undertaking to pay Perenco in full, Perenco has been left with no choice but to take steps to enforce its payments rights against Ecuador in Luxembourg and other jurisdictions."

The government in Quito said Monday it had not received notice of the freezing of its assets in Luxembourg.

In 2017, the ICSID also ordered Ecuador to pay $337 million to US oil company Burlington Resources.

Burlington Resources was working in two oil blocs in Ecuador alongside Perenco in 2008, but halted operations after Ecuador demanded more of the profits.

Ecuador accused both companies in 2009 of abandoning their operations in the country, and cancelled their contracts.