Ecuador has reached an agreement with the company Sinopec to pay $64 million for an arbitration claim generated by unpaid payments, between 2016 and 2017, in the government of Rafael Correa. The agreement consists in the fact that Ecuador must pay 34.98 million dollars in eleven installments, and there will be new meetings to define how the rest will be paid.

According to the Ibero-American Arbitration Center (Ciar Global), the Chinese state-owned company Sinopec Oilfield Service Corporation announced in a press release the agreement it reached with the Ecuadorian state-owned company Petroecuador, regarding international commercial arbitration with its subsidiary Banya Duri Company for outstanding payments related to three oil fields awarded in 2016.

The conflict arose under Rafael Correa’s regime between Petroamazonas – now merged with Petroecuador – and subsidiary Sinopec over disputes over payments for increased oil production, in the Indillana oil field comprehensive services projects. , Yanaquincha and Limoncocha .

In 2019, the consortium introduced arbitration for non-payment by Petroecuador under the rules of the United Nations Commission on International Trade Law (UNCITRAL or Uncitral). The court issued its award in February 2022 and ordered Ecuador to pay approximately $ 64 million Americans in damages plus interest.

In August 2022, the State Prosecutor’s Office of the State of Ecuador filed an appeal to annul the verdict in the Pañaturi case before the Court of Appeals in Santiago, Chile. And in May 2023, the Chilean court issued a first-instance verdict rejecting the said request.

Therefore, in the last milestone of the arbitration, on December 7, 2023, Sinopec reported the settlement agreement between Banya Duri Company and Petroecuador, held in Quito, regarding the payment of part of the award. Under this agreement, Petroecuador will pay a portion of the award in eleven monthly installments beginning in December 2023, totaling approximately $34.98 million. The parties will establish coordinated working meetings to determine appropriate payment plans with respect to the remainder of the award.

In September 2022, it was known that Petroamazonas was ordered to pay $21.2 million for breach of contract for the Indilana field, $21.9 million for breach of contract for the Limoncocha field and $16.2 million for breach of contract for the eastern Yanaquincha field. At that time, the total payments amounted to almost 59.5 million dollars.

The arbitration started in 2019 with the request of Servicios Integrados Pañaturi SA (I)