Guatemala: Texaco Drops Request for OPIC Cover

As repression of the people by the Guatemalan government continues, U.S. companies such as Texaco may be finding it prudent to keep a low profile on their operations in the Central American country. Texaco withdrew an application in December for U.S. Overseas Private Investment Corporation (OPIC) insurance for its Guatemalan oil operations. ,

Texaco and Amoco have been jointly exploring for oil in Guatemala over the past several years. By terms of their production sharing agreement, the Guatemalan government receives at least 58.15% of all oil produced.

OPIC - a U.S. government agency that insures U.S. companies for damages incurred abroad due to such things as nationalization or "civil strife" is prohibited by law from issuing insurance for projects which benefit countries showing "a consistent pattern of gross violation of internationally recognized human rights."

This restriction would have made it difficult for Texaco to obtain the insurance.

"The administration would have turned it down," because of Guatemala's human rights violations, says Bruce Cameron, a staffer for Representative Tom Harkin (D-lowa) of the House Foreign Affairs Committee.

Texaco cited only unspecified "business reasons" for withdrawing the application. OPIC insurance or no, the company is continuing with its $135 million project of oil well testing in the Peten area of northern Guatemala, near the country's border with Mexico.