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Ecuador signs deal with Petrobras, tells Repsol to get out(EFE Ingles Via Acquire Media NewsEdge) Quito, Oct 31 (EFE).- Ecuador's government used Friday's signing of a new accord with Brazilian state oil giant Petrobras to announce it was expelling Spain's Repsol YPF because the firm was balking at converting its drilling concessions into a services contract. The minister of Mines and Petroleum, Derlis Palacio, said Quito would not hesitate to take a similarly tough line with other companies if they did not agree to operate under the new regime. He made the surprising announcement about Repsol during a joint press conference with a representative of Petrobras, which agreed to sharply increase the Ecuadorian government's share of revenues from oil fields that produce a total of 32,000 barrels per day. "Lamentably, we have not been able to reach an accord with Repsol," Palacios said. "They have constantly changed their position and we have not been permitted to arrive at a negotiation." Accordingly, he continued, "the Ecuadorian state has made the decision to terminate the relationship with Repsol and we have instructed (state-owned) Petroecuador to begin the early termination of the contracts they (Repsol) maintain in the country." The minister said Repsol YPF would have to leave Ecuador "as soon as the established legal processes are fulfilled." Asked whether the government might reconsider, Palacios said: "the decision is made." But sources at Repsol headquarters in Madrid told Efe the company was not aware of any breach with the Ecuadorian government and that it still hoped to reach accord with Quito on a new contract. Spanish Prime Minister Jose Luis Rodriguez Zapatero, speaking from the site of the Ibero-American Summit in San Salvador, was likewise taken aback by Palacios' statement and voiced confidence that negotiations would continue. "That is the impression I have, and that is what both the government of Ecuador and Repsol need to do," the premier said. On the possibility that his administration would try to mediate between the parties, Zapatero said officials in Madrid were already talking to Repsol and to Ecuadorian authorities. In Quito, Palacios accused Repsol of a "lack of seriousness" about the contract talks and of having gone back on earlier agreements. Repsol currently operates three separate concessions comprising 1,225 sq. kilometers (473 sq. miles) of Ecuadorian territory and holding estimated reserves of 15.2 million barrels. The three concessions produced a total of 6.6 million barrels of oil in 2007. Regarding the new deal with Petrobras, Petroecuador CEO Luis Jaramillo told reporters it was "positive" for Ecuador, while Palacios called the pact "good news ... in this epoch of global crisis." The revised contract boosts the state's share in the field operated by Petrobras and its partners from 67 percent to 81 percent, including taxes, royalties and a share of production. Palacios said the accord with Petrobras demonstrates the good faith and seriousness of President Rafael Correa's leftist government on the issuer of renegotiating oil contracts. Correa, a U.S.-educated economist, is insisting that foreign oil companies with interests in Ecuador shift from production-sharing accords to services contracts that keep ownership of the petroleum in state hands. Ecuador has successfully renegotiated its pacts with Andes Petroleum and Petrobras, and Palacios said Friday that a new deal with France's Perenco could be signed as soon as next week. Another firm, City Oriente, is withdrawing from Ecuador after reaching an amicable settlement with Quito. Palacio urged all oil companies with interests in the Andean nation to make the necessary investments to boost production. "We will not accept the pretext that as long as they don't know the details of the services contracts, investment remains stalled and the investment is not recovered," he said. Oil is Ecuador's main export, and the Andean nation currently produces around 500,000 barrels per day of crude, of which state-owned Petroecuador accounts for some 173,000 bpd. Revenue from oil exports finances roughly 35 percent of Ecuador's public spending. EFE sm/dr Copyright ? 2008 EFE News Services (U.S.) Inc. |