Ecopetrol Updates on Refinería de Cartagena and Arbitration Proceeding

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(Ecopetrol, 11.Sep.2023) — Ecopetrol issues the following response in relation to the statement on 8 September 2023 by McDermott International regarding its intention to start financial restructuring proceedings for its CB&I subsidiaries in the United Kingdom and the Netherlands, in the aftermath of the arbitral award issued by the International Arbitration Tribunal of the International Chamber of Commerce against them and in favor of Refinería de Cartagena S.A.S.

On June 7, 2023, Refinería de Cartagena S.A.S. was notified of the decision of the international arbitration tribunal, which ruled in favor of Refinería de Cartagena in the dispute against CB&I regarding the Engineering, Procurement, and Construction (EPC) Contract for the expansion and modernization of the refinery.

In a unanimous decision, the arbitration tribunal ordered CB&I to pay Refinería de Cartagena S.A.S. US$1,008mn plus interest accrued from 31 December 2015, for breach of its project planning and cost obligations under the EPC Contract.

In addition to its gross negligence during the execution of the EPC contract, by starting restructuring proceedings, CB&I seeks to disregard the effects of the arbitral award issued by the International Arbitration Tribunal, to which they voluntarily submitted and in which they actively participated with the assistance of international law firms and technical experts of their choice.

In that regard, Refinería de Cartagena S.A.S. condemns McDermott International’s statements, which obstructs compliance with the the award issued by the highest commercial arbitration tribunal. Refinería de Cartagena S.A.S. confirms its intention to exhaust all instances to defend its interests and uphold the arbitral award, as it did during the execution of the EPC contract and the arbitration proceedings.

Refinería de Cartagena S.A.S. has been closely monitoring the measures taken by McDermott International in response to the decision of the international arbitration tribunal, including the annulment request filed by CB&I the day after its issuance, and is confident that the decision issued by the arbitral tribunal will be declared valid by the federal judge handling the request.

Refinería de Cartagena S.A.S. has set in motion, in conjunction with a global team of lawyers and experts in the field, all relevant actions to obtain the recognition and payment of the arbitral award in the United States, the United Kingdom, and the Netherlands. Simultaneously, it will actively participate in McDermott International’s corporate restructuring processes in these countries to defend its interests.


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