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Ecuadoreans seeking Chevron's Argentine assets to enforce $19 billion oil spills judgment

Lawyers for Amazonian Indians are seeking the seizure of $2 billion of Chevron Corp.'s assets in Argentina as they try to collect an $18.7 billion environmental judgment won in Ecuador last year.

Argentine lawyer Enrique Bruchou said Thursday that his seizure request should send a strong signal to foreign investors that they must apply the same environmental standards wherever they do business. Similar lawsuits were filed this year in Canada and Brazil.

"We will win this case. And it's going to set an example for the world that we in Latin America have grown up now and that we need to be treated as equals," Bruchou said.

Chevron is refusing to pay, saying fraud marked the trial and that the Texaco Petroleum Co. mitigated the environmental damage long before it became a Chevron subsidiary in 2001.

"The Ecuador judgment is a product of bribery, fraud, and it is illegitimate. The company does not believe that the Ecuador judgment is enforceable in any court that observes the rule of law," the San Ramon, Calif.-based oil giant said in a statement.

The plaintiffs say Texaco and now Chevron remain responsible for environmental contamination and illnesses resulting from its operation of an oil consortium from 1972 to 1990 in the country's lush rainforest.

Chevron argues that a 1998 agreement Texaco signed with Ecuador after a $40 million cleanup absolves it of liability, and that Ecuador's state-run oil company is responsible for much of the pollution in the oil patch Texaco quit more than two decades ago.

A court judgment freezing Chevron's assets in Argentina probably couldn't come at a worse time for President Cristina Fernandez.

Chevron is a major player in Argentina, producing about 26,000 barrels of crude and 4 million cubic feet of natural gas daily, the plaintiffs said.

More importantly for Argentina's future energy needs, Chevron has agreed to work with the state-run YPF oil company to develop shale reserves that could be the third-largest in the world. But despite YPF's campaign to attract new foreign investors, neither Chevron nor any other major oil company has publicly committed to spending the billions necessary to extract this oil and gas. Analysts blame Argentine government interventions for scaring away investment.

Bruchou said he doesn't believe the Fernandez government will intervene to protect Chevron. According to a treaty Argentina signed years ago, he said its courts can automatically freeze the assets of defendants who refuse to pay final court judgments in other countries, without any government involvement whatsoever.

"We don't want this politicized. This has nothing to do with the Republic of Argentina. This is the communities of Ecuador going against Chevron," he said. "I don't think we will see interference because frankly this is a civil matter, combined with the human rights abuses, which is an issue very dear to the heart of the Argentines."