I. FACTS

A. THE PARTIES

1. The Claimant

1. The Claimant, Burlington Resources Inc. (“Burlington” or the “Claimant”), is a corporation existing under the laws of the State of Delaware, United States of America, founded in 1988, and active in the exploitation of natural resources. On 31 March 2006, Burlington was acquired by ConocoPhillips, a multinational energy company with headquarters in the State of Texas, United States of America.

2. The Claimant is represented in this arbitration by Jan Paulsson, Nigel Blackaby, Alexander Yanos, Christopher Pugh, Noiana Marigo, Jessica Bannon Vanto, Viren Mascarenhas, Sam Prevatt and Ruth Teitelbaum of FRESHFIELDS BRUCKHAUS DERINGER US LLP; by Prof. James Crawford of Matrix Chambers, Gray's Inn, London; and by Javier Robalino-Orellana of PAZ HOROWITZ, Quito.

2. The Respondent

3. The Respondent is the Republic of Ecuador (“Ecuador” or the “Respondent”).

4. The Respondent is represented in this arbitration by Dr. Diego García Carrión, Álvaro Galindo Cardona (until March 2011), Francisco Larrea, and Christel Gaibor from the PROCURADURÍA GENERAL DEL ECUADOR; and Eduardo Silva Romero, Pierre Mayer, José Manuel García Represa, Maria Claudia Procopiak, Philip Dunham, Ella Rosenberg, George Foster and Ana Carolina Simoes e Silva of DECHERT (Paris) LLP. Dr. Galindo joined DECHERT in March 2011.

B. ECUADOR'S OIL INDUSTRY: THE PRODUCTION-SHARING CONTRACT MODEL

5. This Section summarizes the facts of this dispute insofar as they bear relevance to rule on Respondent's purported liability under the Treaty between the United States and Ecuador concerning the Encouragement and Reciprocal Protection of Investment" (the "Treaty" or "BIT").