ECUADOR: Oil firms have until November to sign new deals

Record ID: 343843

  • Title: ECUADOR: Oil firms have until November to sign new deals
  • Date: 25th August 2010
  • Summary: QUITO, ECUADOR (FILE) (REUTERS) VARIOUS OF EXTERIORS OF THE PRESIDENTIAL PALACE
  • Embargoed: 9th September 2010 13:00
  • Keywords:
  • Location: Ecuador
  • Country: Ecuador
  • Topics: Industry,Energy
  • Reuters ID: LVA1J112ZP0QEWM97EFDM3GH4A02
  • Story Text: Major oil companies operating in Ecuador will have until November to sign new contracts aimed at increasing government control over the sector, President Rafael Correa told reporters on Tuesday (August 24).
    "I haven't had an opportunity to speak to Oil Minister Wilson Pastor. What I want to say is that they have until November or December, and it's their problem if they delay the negotiations, because if this isn't done they will have to leave the country," he said.
    "They should be the interested parties in the transition to new, definitive contracts concerning loans and services being made as fast as possible. They will sincerely have to leave the country and we will go with other service contracts," he added.
    The companies which do not sign the pacts, that are designed to bolster state revenues, will have to leave the country.
    Contract talks are scheduled to start this week.
    Ecuador has the rotating presidency of the Organization of the Petroleum Exporting Countries this year.
    Private firms operating in Ecuador include Spain's Repsol, Brazil's Petrobras and Italy's Eni.
    Ecuador's government will take at least 85 per cent of revenue under the new contracts, the government's minister for oil policy Wilson Pastor said earlier this month.
    The state currently receives an average 65 per cent of the revenues generated by private firms operating in the country.
    Profit margins for investment in new oil fields will be 18 to 22 percent under the new pacts while profitability will be 15 to 18 percent for investments in producing fields, Pastor said.
    The government's feuds with foreign oil companies in recent years included the takeover of local assets of U.S. oil company Occidental Petroleum.
    The government declared Oxy's contract had expired and its concession should be returned to state control. Citing a tax dispute, the government last year also took charge of the operations of two oil blocks belonging to French oil company Perenco.
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