Ecopetrol’s Reficar to sue US contractor

Refinería de Cartagena (Reficar), owner and operator of Colombia’s Cartagena refinery, announced a USD 2 billion lawsuit against US contractor Chicago Bridge & Iron (CB&I) and its local subsidiary on Tuesday. Reficar said it would seek international arbitration on account of what it called CB&I’s failure to “execute the planned expansion and modernisation” of the refinery.

The claim lodged by the wholly owned Ecopetrol affiliate highlights “failures in the execution of the engineering, procurement and construction contract,” according to the state entity. Reficar had previously tried to settle directly with CB&I, without result. Ecopetrol had counted on CB&I to be willing to compensate Reficar for cost overruns. Originally budgeted at USD 3.9 billion, the cost of the project ballooned to more than USD 8 billion over the past seven years.

According to Colombian media, Ecopetrol’s comptroller overseeing Reficar has gathered ample evidence against CB&I over the past three years, reportedly finding 2,460 instances of inflated contracts.

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