Chevron Estimate for Amazon Damages Rises by $11 Billion

Nov. 27 (Bloomberg) – Chevron Corp., which acquired Texaco Inc. in 2001, said a consultant in Ecuador raised by $11 billion his estimate of damages the company may have to pay for pollution in the Amazon allegedly caused by Texaco.

A new report by geologist and environmental consultant Richard Cabrera said Chevron, the second-biggest U.S. oil company, should pay as much as $27 billion, the company said in an e-mailed statement. Cabrera upped his April estimate of $16 billion to increase compensation for people whose family members have cancer, payments to clean up soil and groundwater contamination and fines for unjust enrichment, Chevron said.

“Cabrera again does not identify any of the individuals allegedly impacted by oil operations,” Kent Robertson, a Chevron spokesman, said yesterday in an e-mail. “Cabrera still does not offer any legal grounds or evidence to justify his incremental assessment for unjust enrichment.”

Chevron is being sued on behalf of 30,000 Amazon residents in a court in Lago Agrio, Ecuador, on claims that Texaco dumped toxic waste from oil drilling in the jungle from 1964 to at least 1990. Chevron says Texaco cleaned up its operations and Ecuador’s state-owned oil company is responsible for any contamination in the area. A judge may rule on damages next year.

Chevron has questioned the impartiality of Cabrera, who was appointed to serve as a technical expert by the Ecuadorian court. Robertson said some of Cabrera’s arguments for increasing the damage estimate closely match claims by lawyers for the plaintiffs in the case.

“The new damages assessment is consistent with the costs of large environmental cleanups around the world,” said Steve Donziger, an attorney for the Ecuadorians.

Regarding Chevron’s concerns about Cabrera’s fairness, Donziger said, “This report is produced by an independent expert appointed by the court and paid by the court. Chevron itself accepted this same expert and paid part of his fee in an earlier part of the case.”

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net
Last Updated: November 27, 2008 00:01 EST


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