Ecuador court orders Chevron to pay $8 billion: lawyer

LAGO AGRIO, Ecuador (Reuters) - A court in Ecuador's Amazon jungle ordered CHEVRON (CVX.NY)Corp to pay more than $8 billion in damages on Monday in a closely watched environmental suit, the plaintiffs' lawyer said.

But the U.S. oil company vowed to appeal, meaning the long-running case dating from drilling in the South American nation during the 1970s and 1980s could last for years more.

The case, which activists portray as a fight for justice against rich polluters but Chevron says is more to do with opportunism, has triggered related legal action in U.S. courts and international arbitration.

It is being monitored by the oil industry for precedents that could lead to other large claims. Chevron had expected to lose the case in the Ecuadorean court.

In a statement on Monday, Chevron did not give any figure from the ruling by the court in Lago Agrio, but said it believed the judgment was "illegitimate" and "unenforceable in any court that observes the rule of law."

It said the United States and international tribunals had already taken steps to bar enforcement of the ruling.

Pablo Fajardo, a lawyer for the plaintiffs, said the court had ordered Chevron to pay more than $8 billion damages.

The lawsuit had originally demanded $27 billion.

LENGTHY APPEALS

Residents of Ecuador's Amazon region have said faulty drilling practices by Texaco, which was bought by Chevron in 2001, caused damage to wide areas of jungle and harmed indigenous people in the 1970s and 1980s.

Investors are watching the case closely to see what precedent could be set for other mega-lawsuits.

"This ruling is an intermediate step. The appeals could go on for many years," said John van Schaik, oil analyst at Medley Global Advisors in New York.

"But the fact that the Lago Agrio court ruled in favor of the plaintiffs sends a signal to oil companies that, more than ever, they need to be good corporate citizens," he added.

"The ruling shows that times have changed, and companies need to take environmental concerns seriously."

Texaco first struck oil in Ecuador in 1967 and started pumping in 1972 as part of a consortium with the state. The company operated in Ecuador until 1990. Soon after, it turned its share of the consortium over to the Ecuadorean government.

State oil company Petroecuador has continued drilling in the area over the last 20 years since Texaco pulled out.

"If you look at the Exxon-Valdez case, that took 20 years to settle," said Allen Good, oil analyst at Morningstar in Chicago. "I think there were expectations that the initial judgments would go against Chevron and I think the case is going to play out over a very long time."

Chevron shares closed up 1.3 percent on the New York Stock Exchange on Monday.

(Additional reporting by Santiago Silva in Quito, Alexandra Valencia and Hugh Bronstein in Bogota, Anna Driver in Houston, writing by Hugh Bronstein; Editing by Andrew Cawthorne, Daniel Wallis and Matthew Lewis)

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