Eric Watkins
Senior Correspondent
LOS ANGELES, Jan. 29 -- Ecuador's President Rafael Correa, advancing a deadline mooted earlier, said Jan. 26 that international oil companies operating in his country—including City Oriente, Petroleo Brasileiro SA (Petrobras), Perenco, Repsol-YPF SA, and Andes Petroleum—would have 45 days to accept new agreements.
The government wants to change the current contracts from joint ventures, which allow IOCs to include Ecuadorean reserves on their balance sheets, to subcontracting deals, which do not.
Oil and Mines Minister Galo Chiriboga, who earlier spoke of a May deadline for the changes, also warned the companies that the new contracts would end their option of appealing to the World Bank's International Centre for Settlement of Investment Disputes.
In 2007 Correa's government unilaterally altered the allocation of the windfall produced by the rise in international oil prices: the government now takes 99% of the windfall and the companies get 1%—a decision the companies are fighting in the courts.
Correa gave the companies three choices: to accept the 99% decree, to accept the new contracts, or to leave the country. If they leave, Correa said, the government will reimburse them for their investment and turn their fields over to state-owned oil company Petroecuador.
Last week, Economy Minister Fausto Ortiz said the government expects to receive an additional $1.1 billion in oil revenues during 2008, all coming as a result of the new taxation on foreign companies' extra oil revenues.
Ortiz acknowledged that the additional revenue will depend on the renegotiation of contracts with the five oil companies.
Contact Eric Watkins at [email protected].
