Geologist Richard Cabrera was appointed by the Ecuador court last year to prepare as assessment of damages. At the time, Chevron petitioned the court to dismiss Cabrera.

His report, submitted to the court on April 1, according to news report, set a minimum of $7 billion in damages to remediate damage. The maximum figure of $16 billion would include penalties for "unjust enrichment."

The case is one of the largest environmental suits against an oil company, and stems from Texaco's operations in Ecuador from the mid-1960s to 1990, when it operated a large oil drilling concession there in partnership with Petroecuador, the state-owned oil company. Texaco merged with Chevron in 2001.

Chevron said Wednesday in a five-page statement it would petition the court to strike the report, which it called "flawed and patently partisan," from the court record.

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2008/03/31/daily64.html

Updates with comments)

By Mercedes Alvaro

Of DOW JONES NEWSWIRES

QUITO -(Dow Jones)- An independent expert has submitted a court report recommending that U.S. oil company Chevron Corp. (CVX) pay at least $8.3 billion - or as much as $16 billion - in compensation for environmental damages in Ecuador, plaintiffs' lawyers told Dow Jones Newswires on Wednesday.

Chevron is facing a lawsuit in Ecuador for alleged contamination in the Amazon region of Lago Agrio by Texaco, which Chevron acquired in 2001. The company is accused of having used out-of-date technology that led to environmental damage.

The complaint started in 1993 with a lawsuit in New York courts, which ruled that the case should be tried in Ecuador. In May 2003, several indigenous groups filed a lawsuit against the company in Lago Agrio, Nueva Loja.

The official report was submitted Tuesday to the court in Nueva Loja by expert Richard Cabrera, lawyer Pablo Fajardo said.

Fajardo said that, according to Cabrera's report, environmental damage is estimated at $8.3 billion, and that Texaco saved around $8 billion by scrimping on its cleanup efforts, by using poor technology and having bad environmental practices.

The judge presiding over the case can choose to accept, reject partially or reject fully the findings of Cabrera's report. The judge also could name another expert.

Efrain Novillo, the judge in charge of the case, confirmed to Dow Jones Newswires that the court received Cabrera's report on Tuesday.

"Right now, I'm only a judge in charge. I'm reviewing the process and the file of Chevron's case to determine the corresponding steps, which could be only to send the report to both parties," Novillo said.

When the report is delivered, according Novillo, there will be a reasonable time to appeal. This could be between 60 and 100 days, periods of time that are similar to those used in other cases.

Novillo said Cabrera's report has around 600 pages and around 5,800 pages as annexes.

According Fajardo, the Cabrera report found that Chevron's operations were the main cause of the extensive contamination when it was the exclusive operator of an oil concession; that Chevron has incorrectly managed waste from oil wells; that the company dumped 100% of its production water into streams and rivers; and that Chevron burned gases that went into the atmosphere.

Fajardo added that the report also found that the concession area is contaminated with hydrocarbons in concentrations many times higher than allowed and that Chevron's practices have caused damage to the human population.

Company Hopes For Rejection Of Report

Ricardo Reis Veiga, Chevron vice president and legal counsel, told Dow Jones Newswires in a phone interview that the company hopes the judge will reject Cabrera's report.

"Chevron finds (it) quite strange that an expert who should be independent has submitted his report with submission to the plaintiffs. We have reports that yesterday Cabrera went to the court with Fajardo. We never received a notification about when the report (was to) be submitted," Reis Veiga said Wednesday.

Veiga insisted that Cabrera's report isn't impartial, among other things, because he has used equipment of the Frente de Defensa de la Amazonia, a group that supports the plaintiffs.

According to Reis Veiga, when the trial began the plaintiffs didn't include an evaluation about the costs of the damage.

"It is also a direct violation of court orders," he said. "The court has never ordered Cabrera to include an economic valuation of the remediating costs. Cabrera has submitted an absurdly high estimate on the costs. It is the plaintiffs' strategy to press (the company) to negotiate an agreement...we won't negotiate because we are right and we will continue fighting to demonstrate it."

Chevron may turn to the international arbitration process, based on a bilateral treaty of protection of investments signed between Ecuador and the U.S. One of these courts could be the International Centre for Settlement of Investment Disputes.

The company denies the lawsuit's allegations and said it spent about $40 million meeting all requirements for environmental cleanup that were agreed upon with the Ecuadorian state oil company, Petroecuador.

Chevron has also said that in 1998, Petroecuador released the U.S.-based company from any liabilities regarding cleanup efforts.

Chevron has said several times that in the last 15 years, Petroecuador, which took over Texaco's assets, hasn't fulfilled its environmental obligations and its history of environmental neglect and poor quality operations are well documented.

Chevron has also said repeatedly the court case in Ecuador suffers from serious irregularities, as well as a lack of seriousness and impartiality, and that the Ecuadorian government has interfered in the legal proceedings.

The oil major's general counsel, Charles James, told Dow Jones Newswires Tuesday that Chevron would appeal any ruling against it in Ecuadorian courts before seeking international arbitration, if necessary.

-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@ dowjones.com

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