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Chevron Ordered By Ecuador Court To Pay $8 Billion

02/14/2011 04:27 pm ET | Updated May 25, 2011

LAGO AGRIO, Ecuador (Reuters/Victor Gomez) - A court in Ecuador's Amazon jungle has ordered Chevron to pay $8 billion in a closely-watched environmental lawsuit, but the U.S. oil company rejected the ruling as "illegitimate".

The highly controversial case has triggered related legal action in U.S. courts and international arbitration and is being monitored by the oil industry for precedents that could lead to other large claims.

In a statement on Monday, Chevron did not give any figure from the ruling by the court in Lago Agrio.

But 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.

The U.S. oil company said it would appeal the decision. "The Ecuadorean court's judgment is illegitimate and unenforceable," Chevron said in a statement.

Residents of Ecuador's Amazon region have said that 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.

(Additional reporting by Santiago Silva in Quito, Alexandra Valencia and Hugh Bronstein in Bogota, writing by Patrick Markey in Bogota)

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