Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Aug. 5 – Ecuador's ministry of oil and mines, under orders from President Rafael Correa, established an internal committee to revise OCP Ecuador’s contract to operate the 500-km Oleducto de Crudos Pesados (OCP) oil pipeline.
Minister Germanico Pinto, taking his cue from remarks last month by Correa, said the committee will have 45 days to analyze the legal, economic, technical, and other aspects of the contract.
“We're going to tell these people that they are stealing from the Ecuadorean state—we're going to renegotiate the OCP contract,” Correa said in mid-July over national television. “They've evaded hundreds of millions of dollars worth of taxes—we’re no longer going to allow that,” he added.
In particular, Correa said Ecuador would insist on renegotiating the contract because the line’s owners reported fictitious loans with high interest rates, withheld the real cost of shipped crude oil and inflated the price of the pipeline's construction.
The $1.4 billion OCP line, which began operations in 2003, transports crude from fields in Amazonia to the OCP maritime terminal in Esmeraldas province. In March, reports said the line was carrying an average of 200,000 b/d of crude oil, less than half its normal load of 450,000 b/d.
In February, the line was shut down after damage caused a spill of 14,000 bbl of crude in the northeastern province of Napo. The company said the damage had been caused by natural phenomena.
The OCP's shareholders are Occidental Petroleum Corp., Repsol YPF SA, Petroleo Brasileiro, Perenco Corp., ENI SPA, and Andes Petroleum, a joint venture of China National Petroleum Corp. and Sinopec Overseas Oil and Gas Ltd.
Contact Eric Watkins at [email protected].