Wednesday, August 25, 2010

Fox News: Chevron Shares Held Down by $27b Ecuador Environmental Liability

Chevron has been desperate to downplay its potential $27 billion environmental liability in Ecuador. It employs dozens of lobbyists and lawyers to distract attention from the fundamental fact the company's financial picture is materially and adversely affected by the Ecuador liability. It spends millions on a widespread legal and public relations assault against the affected indigenous communities, directed by the law firm Gibson, Dunn & Crutcher. But it appears that the markets aren't buying what Chevron and its law firm are selling. According to this article that appeared on Fox Business, Chevron's shares have been shedding value due in part to the massive liability the company faces in Ecuador. The Gibson Dunn lawyers clearly need to step up their game if they hope to continue billing massive amounts of money in an increasingly futile effort to get their client off the hook for its human rights violations in the Amazon. Read on:

Chevron Down as It Continues to Fight $27B Environmental Lawsuit in Ecuador

By Jennifer Booton

Published August 24, 2010


Despite tripling its second quarter profit last month, Chevron (CVX: 73.74 ,-1.32 ,-1.76%) has since fallen nearly 2.46%, as it remains under the grip of a $27.3 billion lawsuit, the largest environmental damages lawsuit ever tried.

The company reported quarterly earnings last month of $2.70 a share on sales of $48.9 billion, beating estimates by 24 cents, though missing revenue expectations by $9.7 billion.

The strong results catapulted Chevron's stock to a 10-day winning streak, peaking on Aug. 10 at $79.32.

But the oil company has lost much of its gains over the past few weeks as it continues to fight a lawsuit in Ecuador that alleges Texaco, acquired by Chevron in 2001, wrecked portions of a jungle while drilling for oil in the 1970s and 1980s.

Chevron has fought the accusations, filing a petition earlier this month before the Provincial Court of Sucumbíos in Lago Agrio in Ecuador seeking dismissal.

The court's decision, expected in the months ahead, may be appealed to Ecuador's Supreme Court, and the energy giant has vowed to do so if it loses the case.

Chevron traded in the red Tuesday, down about 1.20% to $72.15 at 2:40 PM EST