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Tuesday, May 05, 2009

Chevron to Appeal Any Adverse Ruling in Ecuador Case

By Tony Cox and Karen Gullo

May 1 (Bloomberg) -- Chevron Corp., the second-biggest U.S. oil company, said it plans to appeal any adverse ruling in an Ecuador pollution lawsuit that could lead to a damage award of as much as $27 billion.

A ruling in the case may be made “any day now,” Chief Financial Officer Patricia Yarrington told investors today on Chevron’s earnings conference call. She said the case may be politically influenced and could drag on for years on appeal. Lawyers for the plaintiffs say they expect a ruling in the fall and deny the case is influenced by politics.

Chevron, based in San Ramon, California, doesn’t expect a significant financial impact from the suit, Yarrington said. There’s “not much factual data” behind a consultant’s estimate that the case could lead to $27 billion in damages, she said.

The company is being sued on behalf of 30,000 Amazon basin residents on claims that Texaco Inc., which Chevron acquired, dumped toxic waste from oil drilling in the jungle from 1964 to at least 1990. The case began in 1993 in New York and now is being handled in a court in Lago Agrio, Ecuador.

Steven Donziger, an attorney for the Ecuador residents, said the damages estimate is based on 4,000 pages of evidence of contamination and health and social effects. A ruling is still several months off, he said today in a telephone interview.

An expert for the court will issue reports on recent soil inspections, and both sides can submit comments on the reports, a process that will take up to three months, Donziger said. A ruling would come after that.

If the judge awards damages to the plaintiffs, Donziger said he will ask courts in the U.S. and Ecuador to enforce the ruling and require Chevron to post a bond.

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