QUITO (Reuters - July 16) - French oil company Perenco said on Thursday that the Ecuadorian government had "confiscated" its operations in the South American country over a tax dispute, a claim denied by the government.
"What they did was to take control of the installations, the fields, and the operations ... that's called expropriation," Perenco's Latin American manager Rodrigo Marquez told Reuters.
The government said in a statement that officials from state-run oil company Petroecuador only went to the blocks controlled by Perenco to "make sure that they were (producing) normally," because Perenco had threatened to halt operations in Ecuador starting on Thursday.
"The workers did not receive an order (to halt production). Everything is normal (in the oil fields)," a spokesman from state-run oil company Petroecuador told Reuters.
Perenco had a very different take on the situation.
"They (Petroecuador officials) spoke with the workers and told them clearly that they were taking control," Marquez said.
Leftist Ecuadorian President Rafael Correa, an ally of Venezuelan leader Hugo Chavez, is trying to increase state revenue from the key oil sector, but has so far shied away from nationalizing oil companies.
His government has seized the bulk of Perenco's production since March in a bid to collect more than $350 million it says the company owes in windfall taxes.
Perenco extracts 22,000 barrels of oil per day from two blocks in Ecuador's Amazon jungle, or around 4.5 percent of the country's total output, which amounted to 486,000 barrels per day in May.
The Ecuadorian government had previously said that it was not going to allow Perenco to halt output.
The Petroecuador spokesman on Thursday said that officials were "not going to take measures" against the company because output had not been disrupted.
The government is trying to sell some 2 million barrels of oil confiscated from Perenco, and the only bidder so far has been Petroecuador.
Burlington Resources, a subsidiary of ConocoPhillips (COP.N), has stakes in the two blocks operated by Perenco in Ecuador.
Perenco launched a suit against Ecuador and Petroecuador last year to dispute the legality of the windfall tax, saying the levy violates its contract.
The World Bank's International Center for Settlement of Investment Disputes accepted a request from Perenco in May to block any forceful collections until the center rules on the legality of the windfall tax.
Ecuador hiked the tax to 99 percent from 50 percent in 2007 as a way to pressure foreign oil companies to rework their extraction deals, but later lowered the tax to 70 percent.
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