Dragging out ongoing negotiations on new contracts with foreign oil companies would represent a high "opportunity cost" to Ecuador, Oil Minister Galo Chiriboga said Friday.
"I hope that in the least amount of time possible we can resolve these negotiations," Chiriboga said at a press conference. "I have emphasized to the Petroecuador [state oil company] negotiators the opportunity cost which this represents."
Chiriboga said that he has met personally with all representatives designated by the foreign oil companies involved in the negotiations. They are Brazilian state controlled oil Petrobras, France's Perenco, Spain's Repsol YPF, Chinese state consortium Andes Petroleum and City Oriente. Oil ministry and Petroecuador representatives are also involved in the talks.
The government wants the oil companies to switch from their current production-sharing arrangements to service contracts in which they are paid only to produce oil for the state. Chiriboga said that talks have so far been cordial.
"There is an environment open to discussion," he said. "There are probably things that we propose that the companies do not like, but that is life."
This comes after the government in October increased its take of windfall oil income to 99% from 50% of the amount above reference crude prices set when contracts were signed. Recent tax reforms would limit the state's take of extra crude income to 70% in new contracts.
Foreign oil companies complain that this makes their Ecuadorean production unprofitable. Some companies, such as Repsol, have said that they could appeal to international arbitration if new contracts are not signed before mid-2008.
Ecuador's crude output of about 510,000 b/d, with foreign oil companies producing about half of that, makes it OPEC's smallest producer.
"I hope that in the least amount of time possible we can resolve these negotiations," Chiriboga said at a press conference. "I have emphasized to the Petroecuador [state oil company] negotiators the opportunity cost which this represents."
Chiriboga said that he has met personally with all representatives designated by the foreign oil companies involved in the negotiations. They are Brazilian state controlled oil Petrobras, France's Perenco, Spain's Repsol YPF, Chinese state consortium Andes Petroleum and City Oriente. Oil ministry and Petroecuador representatives are also involved in the talks.
The government wants the oil companies to switch from their current production-sharing arrangements to service contracts in which they are paid only to produce oil for the state. Chiriboga said that talks have so far been cordial.
"There is an environment open to discussion," he said. "There are probably things that we propose that the companies do not like, but that is life."
This comes after the government in October increased its take of windfall oil income to 99% from 50% of the amount above reference crude prices set when contracts were signed. Recent tax reforms would limit the state's take of extra crude income to 70% in new contracts.
Foreign oil companies complain that this makes their Ecuadorean production unprofitable. Some companies, such as Repsol, have said that they could appeal to international arbitration if new contracts are not signed before mid-2008.
Ecuador's crude output of about 510,000 b/d, with foreign oil companies producing about half of that, makes it OPEC's smallest producer.
