Eric Watkins
Senior Correspondent
LOS ANGELES, Jan. 28 -- Ecuador has begun renegotiating contracts with five international oil companies in an effort to boost state control over the country's crude oil reserves. Under current contracts, foreign companies own the oil they extract.
Oil and Mines Minister Galo Chiriboga said the administration of President Rafael Correa wants to revise the contracts, allowing the state to pay firms a fee for their service, but making sure the government owns all the oil.
"We are the owners of this resource, and we are convinced that this is the best mechanism, as much for us as it is for them, at the moment," Chiriboga said, referring to the IOCs.
Officials are negotiating with five companies: US-based City Oriente, Spain's Repsol YPF, Brazil's Petroleo Brasileiro SA, French-owned Perenco SA, and the Chinese company Andes Petroleum Corp.
Correa signed a decree in October that nearly doubled the state's share of windfall oil profits earnings on oil sold above prices fixed in company contracts.
Last week, the Correa government announced it would this year invest $2 billion in its oil industry to increase production by 11%. Ecuador is South America's fifth largest oil producer, averaging 510,000 b/d of output.
Contact Eric Watkins at [email protected].
