By Stephan Kueffner
Jan. 26 (Bloomberg) -- Ecuador's President Rafael Correa set a March 8 deadline for oil companies to agree to changes in terms for oil contracts with the smallest member of the Organization of Petroleum Exporting Countries.
``We have to put a limit on these negotiations: 45 days,'' Correa said in his weekly radio address today. The talks began on Jan. 21. Even with a long-running rally in crude oil prices, Ecuador's oil production shrank by 9.8 percent in 2007, weighing on gross domestic product growth, according to the central bank.
The companies will have the option of agreeing to be paid for getting the oil out of the ground, as the government wants, or to continue under present terms and pay the government a 99 percent tax for windfall profits above contracted prices.
Companies also may leave, in which case the country will pay them for investments carried out to date, said Correa, a U.S.- educated economist.
Five negotiating teams for the government are meeting on weekdays with the companies, which include state-owned Petroleo Brasileiro SA; France's Perenco SA; Spain's biggest energy company, Repsol YPF SA; Chinese-owned Andes Petroleum Co.; and the U.S.'s City Oriente Ltd.
To contact the reporter on this story: Stephan Kueffner in Quito at skueffner@bloomberg.net .
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