Sempra Energy awarded $172 million in Argentine arbitration

Oct 2, 2007

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Art Larson

 

Sempra Energy

 

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        SAN DIEGO, Oct. 2, 2007 –  The International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C., has awarded Sempra Energy (NYSE:  SRE), approximately $172 million, including interest, to settle a 2002 dispute involving the company’s 43-percent ownership in two Argentine natural gas holding companies, Sodigas Pampeana and Sodigas Sur. 
 
        “We are pleased that, after several years, this arbitration case has been decided in our favor,” said Javade Chaudhri, executive vice president and general counsel for Sempra Energy.   “We hope that the government of Argentina will honor its legal obligations as we seek immediate enforcement of the award.”
 
        The dispute involved Sempra Energy’s efforts to recover the utilities’ diminution in value that occurred as a result of measures taken by the Argentine government in early 2002.
 
        The Sept. 28, 2007 award involved arbitration proceedings under the 1994 Bilateral Investment Treaty between the United States and Argentina.
 
        The Sodigas companies control Camuzzi Gas Pampeana S.A. and Camuzzi Gas del Sur S.A., together the largest natural gas distributor in Argentina servicing about 45 percent of the country.   They supply gas to 1.5 million customers through a gas transportation-and-distribution pipeline system.

        The ICSID is an autonomous international organization with close links with the World Bank.  All of ICSID’s members are also members of the bank.  The ICSID provides facilities for the conciliation and arbitration of disputes between member countries and its investors.   Recourse to ICSID conciliation and arbitration is entirely voluntary.   However, once the parties have consented to arbitration under the ICSID Convention, neither can unilaterally withdraw its consent.   Moreover, all ICSID Contracting States, whether or not parties to the dispute, are required to recognize and enforce ICSID awards as if it were a final judgment of that country’s court.  

        Sempra Energy (NYSE:  SRE), based in San Diego, is a Fortune 500 energy services holding company with 2006 revenues of nearly $12 billion.  The Sempra Energy companies’ 14,000 employees serve more than 29 million consumers in the United States, Europe, Canada, Mexico, South America and Asia.

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This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  When the company uses words like “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “may,” “would,” ”could,” “should,” or similar expressions, or when the company discusses its strategy or plans, the company is making forward-looking statements.  Forward-looking statements are not guarantees of performance.  They involve risks, uncertainties and assumptions.  Future results may differ materially from those expressed in the forward-looking statements.  Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions by the California Public Utilities Commission, California State Legislature, California Department of Water Resources, Federal Energy Regulatory Commission, Federal Reserve Board, U.K. Financial Services Authority and other environmental and regulatory bodies in the United States and other countries; capital market conditions, inflation rates, interest rates and exchange rates; energy and trading markets, including the timing and extent of changes in commodity prices; the availability of natural gas and liquefied natural gas; weather conditions and conservation efforts; war and terrorist attacks; business, regulatory, environmental, and legal decisions and requirements; the status of deregulation of retail natural gas and electricity delivery; the timing and success of business development efforts; the resolution of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond the control of the company.  These risks and uncertainties are further discussed in the company’s reports filed with the Securities and Exchange Commission that are available through the EDGAR system without charge at its Web site, www.sec.gov and on the company’s Web site, www.sempra.com.


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