Petrobras in Ecuador (A) Harvard Case Solution & Analysis

October 18, 2007, Ecuador's Rafael Correa, announced his intention to transfer existing contracts Petrobras participated use oil reserves in Ecuador, 18 blocks and 31 service contracts, in which Petrobras will be given to the production and reimbursement of investment costs, but all recovered oil will belong to the government . Correa has also announced a sharp increase in corporate taxes and changes in other treaties to which Petrobras was a party. All of the foreign oil companies operating in Ecuador will have the same effect and any company refuses to "reconsider" their contracts will face a 100% tax. How to respond to Petrobras Ecuador assert their contracts? If you take the Petrobras Ecuadorian government to arbitration? Or would it be better to continue a peaceful solution, similar to that reached in Bolivia in the last year? As Petrobras balance their fiduciary duties and the best interests of its shareholders with the interests of the Government of Brazil? How it should interact with various constituencies? "Hide
by Aldo Musacchio, Lena G. Goldberg, Ricardo de-Reisen Pinho Source: Harvard Business School 23 pages. Publication date: April 02, 2009. Prod. #: 309107-PDF-ENG

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