Main Content

Top Oil Industry Analysts Say It’s Time For Chevron To Settle In Ecuador

Chevron oil handOppenheimer’s Fadel Gheit is one of the top oil industry analysts in the world. What he says carries a lot of weight. And right now, he’s saying that it’s time for Chevron to reach a settlement in Ecuador. Specifically, Gheit is saying that a recent decision by the US Supreme Court to hear a case over Shell’s alleged violations of human rights in Nigeria has clear implications for Chevron. “If you open the case for Shell, you have to open it for Ecuador,” Gheit told Platts. He also claimed that the trial over Chevron’s massive oil pollution in the Ecuadorean Amazon had become a “distraction” for the company’s management and that it’s time for Chevron’s legal team to “rethink their position.” Another analyst, Mark Gilman of Benchmark Capital, adds that the unresolved Ecuador case puts a “3-5% ‘discount’” on Chevron’s stock. Gilman goes even further, saying that he believes “the shares are undervalued significantly more than that.” But the absolute best quote of the Platts article was from Chevron spokesman Kent Robertson, who said: “I'm not sure I see how a ruling from the US Supreme Court, regardless of which way it goes, would have any influence over Ecuador's courts." This from a guy whose whole job has been to defend Chevron’s aggressive, endless litigation strategy with regards to its pollution in Ecuador, which has included seeking to get a court in New York to establish a “worldwide injunction” barring enforcement of the $18 billion judgment Chevron is facing in Ecuador. US federal judge Lewis Kaplan did issue an injunction at Chevron's behest, but the injunction was thrown out by an appeals court this past September, clearing the way for the Ecuadorean plaintiffs to seek enforcement of the judgment in countries where Chevron has assets should Chevron continue to refuse to pay to clean up its mess. [caption id="attachment_16502" align="alignright" width="300" caption="New York State Comptroller Thomas P. DiNapoli"]New York State Comptroller Thomas P. DiNapoli[/caption] Of course, it's not just analysts expressing concerns over Chevron's Ecuador liability: Shareholders are also requesting that the company reevaluate its endless litigation strategy. Many shareholders feel a more productive approach might be to reach a settlement that would provide proper remediation for past damages and allow Chevron to put this controversy behind it. Thomas DiNapoli, the New York State Comptroller and trustee for the $146.9 billion New York State Common Retirement Fund, recently raised this issue in a Huffington Post op-ed entitled "What Chevron Owes the People of Lago Agrio," in which he stated: “Chevron must do what's right for its investors, and its future viability, by negotiating a fair settlement that restores the company's reputation. Chevron, its shareholders and the general public have not and will not benefit from a never-ending courtroom drama."

Rainforest Action Network uses people power to challenge business as usual.

Join Us.

Be the first to comment

Please check your e-mail for a link to activate your account.