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Ecuador wants to favor state firms in oil projects

 

 

 

QUITO
Petroleumworld.com 11 29 07

Ecuadorean President Rafael Correa said on Wednesday his government planned to directly assign oil projects to state companies from allied countries to avoid a long bidding process.

"We are going to ignore the bidding process, because time is crucial for us and a bid could take up to five or six months," Correa told reporters after returning from trips to China and Indonesia.

"The judicial framework already allows us to directly assign projects using strategic alliances with state companies from other countries," he added.

Chinese and Indonesian state-run oil firms should "very quickly " make offers to operate oil fields run by Ecuador's state oil company, Petroecuador, Correa said.

Correa, a left-wing economist, is pushing to rework oil contracts with foreign oil firms to increase the state participation in deals that allow companies to keep part of the oil they extract.

He surprised investors in October by hiking a windfall oil tax that affects companies such as Spain's Repsol.

Correa said an upcoming government-controlled assembly rewriting the constitution would ratify the decision to directly assign oil projects in the nation, which is a member of the Organization of Petroleum Exporting Countries.

Ecuador, South America's No 5 oil producer, has seen its output dwindle in recent years due to scarce investment in state-run oil fields. The country's produces around 500,000 barrels of oil per day, half of which is extracted by private firms.

Story from Reuters 28 11 07

Copyright© 2007 Petroleumworld. All rights reserved.

 

 

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