Chevron’s statement of defence is divided into 14 sections,
which contain the following defined terms:
— “TexPet”: The Texaco Petroleum Company, which is a
fourth-level subsidiary of Texaco that was originally granted
exploration and production rights for the Oriente region of
Ecuador. TexPet was the initial operator of the oil produc-
tion consortium in the region.
— “ROE”: The Republic of Ecuador.
— “Petroecuador”: ROE’s state-owned oil agency that operated
the oil production consortium with TexPet and took over as
its sole operator in 1990.
— “Cabrera”: Richard Stalin Cabrera Vega was a court-appointed independent global assessment expert. He purported to prepare an expert report for the Ecuadorian court
that assessed damages of more than US$16 billion arising
from Texaco’s alleged pollution of the region.
 The 14 sections of Chevron’s statement of defence can be
summarized as follows:
I. Introduction — This section summarizes why Chevron
maintains that the Ecuadorian judgment cannot be recog-
nized or enforced in Ontario.
II. Roles of TexPet and Petroecuador in Ecuadorian Operations
— This section describes the operation of the oil-production
consortium between TexPet and Petroecuador in the
Oriente region of the ROE from 1964 to 1992.
III. Remediation, Settlements and Releases of TexPet and its
Affiliates — This section describes the 1995 settlement
agreement between the ROE, Petroecuador and TexPet,
entered into in 1995 whereby TexPet agreed to perform
environmental remediation work to the region at a cost to
TexPet of US$40 million. In 1998, upon the completion of
this work, the ROE and Petroecuador provided TexPet with
a final release.
Under the terms of the 1995 settlement agreement, TexPet
was also required to continue negotiating with certain
municipalities in the region, including Lago Agrio. These
municipalities had each sued TexPet in 1994 to protect the
health of their citizens and rivers. TexPet settled with all of
these municipalities in 1996, and it was released from
all claims arising from the operation of the oil-production