Ecuador has reached a deal to pay Occidental Petroleum Corp roughly $980 million by April to compensate the company for seizing its oil field in the Andean country, the attorney general said on Tuesday evening.
Ecuador has negotiated down a 2012 arbitration award from the International Center for Settlement of Investment Disputes requiring it to pay the U.S.-based company $1.77 billion.
While Ecuador remains opposed to the arbitration decision, Attorney General Diego Garcia said the country was obligated to pay Occidental. If it does not pay the arbitration award, Ecuador could be exposed to asset seizures.
"We're conscious that the award is enforceable, and if Ecuador doesn't honor it, even if we're right, it could be enforced," Garcia told television channel Ecuavisa, adding that the country would finish paying by April.
The payment is a further hit to the OPEC nation's finances, which are reeling from the slide in energy prices.
Ecuador seized Occidental's field known as Block 15 in 2006, saying its sale to Andes Petroleum had been carried out without government consent.
At the time of the contract termination, Occidental was Ecuador's largest oil investor, extracting about 100,000 barrels per day.
