Ecuador, China Petroriental Reach Accord on Oil Blocks
3 March 2008
Latin America News Digest
The Ecuadorian Government and China's oil company Petroriental SA have finalised the renegotiation of the firm's contract for blocks 14 and 17 in Ecuador, Oil and Mines Minister Galo Chiriboga said on March 2, 2008.
Petroriental's participation contracts for the blocks 14 and 17 were to expire in 2012 and 2018, respectively.
The draft contract has been sent for review to Ecuador's President Rafael Correa after which it will be signed by the ministry and Petroriental.
The company agreed with the renegotiation terms set by the government, which included a better share for the state in the crude oil production and revenue, the minister said. In addition, Petroriental will increase its investments and production.
The state plans to allow private companies to obtain 30 pct of the extra oil revenue, which derives from the high oil prices, in addition to the revenue established in each contract. However, this situation will change in five years at the latest because of a clause in the new contracts that the operators should “migrate” from participation contracts to services contracts once their investments are paid off.
The government aims to sign services contracts under which the state pays private companies for the produced oil.
Petroriental is owned by China National Petroleum Corp and Sinopec.
Source: El Universo , El Universo (DH/RG/DH)
