QUITO, June 1 (Reuters) - Ecuador’s government said on Tuesday it would pay $374 million granted to French oil company Perenco by an arbitration tribunal related to a dispute over a 2007 decree that reserved “extraordinary income” from oil operations for the state.
Perenco sued Ecuador in 2008 over the measure, implemented by leftist then-President Rafael Correa at a time of surging oil prices. The law reserved up to 99% of income from crude sales in excess of a certain level for state coffers.
The company initially demanded $1.4 billion, arguing that the law violated a 1994 investment treaty between Ecuador and France.
“The Ecuadorean state will respect and pay its international commitments,” the communications office for market-friendly President Guillermo Lasso said in a statement. “We will be in touch with the company to find options for resolution.”
The country’s solicitor general’s office said on Tuesday that the ruling by the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) was definitive and that it was not appealing.
In a similar case, the ICSID in 2017 awarded U.S. oil company ConocoPhillips a $380 million judgment after Ecuador seized the company’s assets.
Ecuador’s economy is suffering liquidity issues partly because of a collapse in prices last year for crude oil, the government’s main source of income.
Reporting by Alexandra Valencia; Writing by Luc Cohen; Editing by Peter Cooney