  |
Ecuador oil chief backtracks on Occidental stake in crude pipeline
AP
QUITO
Petroleumworld.com 05 28 06State-run Petroecuador has not decided whether it will take over Occidental Petroleum Corp. stake in the Andean nation's OCP heavy crude oil pipeline, its president said.
Backtracking on comments made Tuesday, when he said the shares would be seized, Petroecuador chief Fernando Gonzalez told Dow Jones Newswires that while he is in favor of seizing the assets, no final decision has been taken.
He said a decision may be reached by next week.
"It is my legal judgment, not as president of Petroecuador, that the shares that Occidental has in the OCP should also revert to the state," Gonzalez said.
A day earlier, Gonzalez told reporters: "Occidental lost control of Block 15 and also the participation it had in the OCP consortium."
Occidental holds a 14 percent stake in the OCP pipeline, which it owned with other private crude producers, including Brazil's Petrobras and Spain's Repsol YPF.
Ecuador canceled Occidental's operating contracts last week and sent troops to seize its assets, claiming the company had broken the terms of its contract by transferring 40 percent of its concession to Canadian company EnCana Corp. in 2000 without authorization from the Energy Ministry.
Occidental denies any breach of contract and filed a claim with the International Center for Settlement of Investment Disputes in Washington, D.C. The company asked an arbitration panel to restore its rights in Ecuador and prevent President Alfredo Palacio's government from installing another company to operate the Block 15 facilities while the dispute is resolved.
The Bush administration last Wednesday said it had broken off free-trade negotiations with Ecuador in response to the action against Occidental.
Ecuador, along with Colombia and Peru, started negotiations with the United States in May 2004 for a free-trade agreement to replace trade preferences granted by Washington since 1991 to help the three Andean countries diversify from the production of coca leaf -- the raw material used for producing cocaine.
The preferences -- covering thousands of products -- are scheduled to end later this year. Ecuador currently exports products such as bananas, broccoli, melons, cut flowers and tuna under the trade preference program.
U.S. Ambassador Linda Jewell said Ecuador's dispute with Occidental was "the worst in a series of trade disputes in recent years that have involved other U.S. companies" and said that several U.S. lawmakers have suggested Ecuador could lose preferential trade status.
She said the U.S. legislation spelling out conditions for preferential trade with the Andean nations rules out countries that have nationalized, expropriated, confiscated or seized property of a U.S.-based company.
The negotiations with Peru concluded in December and an agreement with Colombia was reached in February, although Congress has yet to approve those two measures.
AP 28 05 06
Copyright ©2006 AP. All Rights Reserved.
Your
feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com
Any
question or suggestions, please write to:
editor@petroleumworld.com
Best
Viewed with IE
5.01+
Windows
NT 4.0, '95, '98 and ME +/ 800x600 pixels