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Harken Oil Company Requests $13 Million

July 7, 2006

Harken Costa Rica Holdings (HCRH) representative Brent Abadie is asking for $13 million in damages from the Costa Rican government for the cancellation of a controversial oil exploration contract, according to the daily La Nación.

Abadie has requested the damages before the Arbitration Center of the Costa Rican Chamber of Commerce, a process that the Costa Rican government has rejected, the daily reported. Abadie filed the case March 28 (TT, April 7).

In 2002, the government, under former President Miguel Ángel Rodríguez, signed a contract granting oil exploration and drilling rights off the Caribbean province of Limón to Harken Costa Rica.

When Abel Pacheco became President in 2002, he decreed a moratorium on all future open-pit mining and oil exploration contracts in the country, though Harken was declared exempt (TT, June 7, 2002).

Following protests against Harken Costa Rica, the Technical Secretariat of the Environment Ministry (SETENA) rejected the company’s environmental-impact study (TT, Oct. 10, 2003). The government then rescinded the contract, saying the company’s non-compliance with study requirements was a contract violation.

HCRH, however, disputed this and filed a request for an international arbitration seeking $57 billion in damages – about four times Costa Rica’s domestic product at the time. It later withdrew its request and entered into settlement negotiations with Costa Rica in January 2004, which later broke down as well (TT, Jan 16, 2004 and March 19, 2004).

 

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