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.

Tuesday, January 29, 2008

Ecuador wants to end oil negotiations in 45 days

QUITO, Jan 28 (Reuters) - Ecuadorean President Rafael Correa said he wants oil firms to strike an agreement with the government to overhaul their contracts in 45 days as the state seeks to increase its control over the key sector.

Ecuador started negotiations with five oil firms to switch from contracts that allow companies keep part of the oil they extract to deals in which the state will keep all the crude in exchange for a service fee.

Correa said that if companies are not willing to strike a deal they can either leave the country or continue to pay a windfall tax that the firms said makes their business unviable.

"If they are not happy there is no problem, we don't want to swindle anybody. How much have they invested? $200 million. Here are your $200 million and have a nice day because (state oil firm) Petroecuador will exploit those fields," Correa said during his Saturday radio show.

"We are not going to allow them to keep taking our oil," said Correa, a former economy minister who last year grabbed nearly all windfall revenues generated by oil firms above a set contractual price.

The companies participating in the negotiations include Spain's Repsol, China's Andes Petroleum, Brazil's Petrobras's, France's Perenco and U.S.-owned City Oriente.

"I don't see this a threat, this is actually good for us," said a top industry executive who asked not to be named. "The government has been delaying negotiations and we want to reach an agreement now."

He added that negotiations could lead to a hybrid contract in which companies will still keep part of the oil, but the government receive a bigger share of their revenues.

Ecuador, Opec's smallest member and South America's fifth largest oil producer, has an output of around 500,000 barrels per day.

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