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| Ecuador to take over all oil production: ministers |
| By AFP July 27, 2010 02:01:00 AM |
| | Ecuador, the smallest OPEC member, will Tuesday take control of all oil production within its borders with the introduction of reforms by the socialist government here.
"The entire oil production will be owned by the state," Natural Resources Minister Wilson Pastor said Monday, noting that Quito would be receiving 20 percent of production under the new contract with oil companies.
Ecuador currently produces about 472,000 barrels per day, and oil is its main source of foreign exchange. The reform, which now becomes law because the national assembly had not discussed the agreement on time, completes the sector's takeover by President Rafael Correa.
Since coming to power in January 2007, Correa has repeatedly questioned the contracts between the state and foreign oil companies, arguing they have monopolized too large a share of profits from their ventures.
Those companies that "do not wish to accept the new conditions should prepare to leave the country shortly," said Strategic Sectors Minister George Glass on the reforms.
With the new agreement, the companies have 120 days to accept the new contract with the state, under penalty of having their wells confiscated, Pastor said.
In that event, the government would repay the firms' investment, he added.
Last week Ecuador already moved to void the oil production contracts with Franco-British firm Perenco and its US partner Burlington, in a move expected to lead to the takeover of the company's wells and assets in the country.
Perenco had suspended production in Ecuador in July last year in protest against government seizure of its oil to pay 327 million dollars in back taxes.
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