The people of Ecuador are rising up to refound their country as a pluri-national homeland for all. This inspiring movement, with Ecuador's indigenous peoples at its heart, is part of the revolution spreading across the Americas, laying the groundwork for a new, fairer, world. Ecuador Rising aims to bring news and analysis of events unfolding in Ecuador to english speakers.

Thursday, October 18, 2007

Ecuador says oil firms mull switching deals

QUITO, Oct 17 (Reuters) - Foreign oil companies could consider switching their contracts for deals that will allow Ecuador to keep all the oil they extract, Oil Minister Galo Chiriboga said on Wednesday after holding talks with the firms.

In a move that shocked investors, Ecuadorean President Rafael Correa earlier this month grabbed nearly all the extra oil revenue generated by oil firms above a set contractual price and pushed for companies to accept deals in which the state will pay them a fee to extract oil.

"They have not discarded the possibility of switching contracts," Chiriboga told a local radio station. "But then we need to think about how to compensate their investment that in some cases they say it has not generated profits."

He said talks with the firms late on Tuesday were positive and that the government will create two negotiation groups to overhaul contracts on a case-by-case basis.

No companies were immediately available for comment.

Correa wants to renegotiate deals to boost the state's share of the oil wealth extracted from South America's No. 5 oil producer by firms such as China's Andes Petroleum, Spain's Repsol and Brazil's Petrobras (PETR4.SA: Quote, Profile, Research).

Other companies that are part of the talks are France's Perenco and U.S.-owned City Oriente. Under current contracts companies are allowed to keep part of the oil they produce.

Private oil firms extract nearly half of Ecuador's daily output of 530,000 barrels, and some analysts warn that the country's hard stance on deals could hurt foreign investment in the key sector.

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