QUITO, March 3 - Ecuador will freeze the income of 720,000 barrels of oil produced by French oil company Perenco over a debt row with the government, the head of the state oil company Petroecuador told Reuters on Tuesday.
Ecuador had threatened take immediate action against Perenco to collect about $350 million in debt due on Monday. The debt stems from a controversial windfall tax.
"Perenco has been notified that we will freeze the lifting of March, which means around 720,000 barrels," said Petroecuador chief Luis Jaramillo, adding that negotiations to settle the debt were ongoing.
Under Ecuadorean law, the state could temporarily seize assets or freeze accounts of a company to force payment.
A Perenco spokesman in London was not immediately available for comment. The private company is a small producer with a daily output of around 30,000 barrels.
The freeze is another bold move against foreign investors by the government of leftist President Rafael Correa, who last year refused to pay part of its foreign debt on grounds it was issued illegally by past administrations.
The OPEC nation is scrambling for cash as falling oil prices decrease its foreign reserves.
Analysts say Correa's aggressive stance against foreign companies, although popular among Ecuadoreans, could undermine foreign investment at a time when the country needs funds.
Correa, a popular former economy minister, often threatens foreign companies to squeeze more benefits for the state.
Last week, Ecuador settled a debt with Spanish oil company Repsol after similar threats. Repsol has five years to pay more than $500 million in late taxes.
Oil Minister Derlis Palacios said earlier Perenco could opt for a similar settlement, but said one of the company's partners opposed any agreement.
"They can either fight with their partner or with the state," Palacios said.
Ecuador produces around 500,000 barrels per day extracted almost evenly between private companies and Petroecuador.
Ecuador had threatened take immediate action against Perenco to collect about $350 million in debt due on Monday. The debt stems from a controversial windfall tax.
"Perenco has been notified that we will freeze the lifting of March, which means around 720,000 barrels," said Petroecuador chief Luis Jaramillo, adding that negotiations to settle the debt were ongoing.
Under Ecuadorean law, the state could temporarily seize assets or freeze accounts of a company to force payment.
A Perenco spokesman in London was not immediately available for comment. The private company is a small producer with a daily output of around 30,000 barrels.
The freeze is another bold move against foreign investors by the government of leftist President Rafael Correa, who last year refused to pay part of its foreign debt on grounds it was issued illegally by past administrations.
The OPEC nation is scrambling for cash as falling oil prices decrease its foreign reserves.
Analysts say Correa's aggressive stance against foreign companies, although popular among Ecuadoreans, could undermine foreign investment at a time when the country needs funds.
Correa, a popular former economy minister, often threatens foreign companies to squeeze more benefits for the state.
Last week, Ecuador settled a debt with Spanish oil company Repsol after similar threats. Repsol has five years to pay more than $500 million in late taxes.
Oil Minister Derlis Palacios said earlier Perenco could opt for a similar settlement, but said one of the company's partners opposed any agreement.
"They can either fight with their partner or with the state," Palacios said.
Ecuador produces around 500,000 barrels per day extracted almost evenly between private companies and Petroecuador.
