QUITO, July 15 - French oil company Perenco will temporarily halt operations in Ecuador from Thursday over a fight with the government concerning taxes, a top company executive told Reuters on Wednesday.
Ecuador has seized the bulk of Perenco's production since March in a bid to collect more than $350 million it says the company owes in windfall taxes.
"The suspension will start tomorrow, Thursday 16, at midday Quito time (1700 GMT)," the company's Latin America manager Rodrigo Marquez said in a telephone interview.
"It's going to be something temporary because we are going to keep our personnel there, in the hope that the government backtracks," Marquez said.
In a statement on Wednesday evening Ecuadorean oil minister Germanico Pinto called Perenco's decision "illegal, unilateral and arbitrary", and said the government will take "the necessary measures" to guarantee the interests of the state.
Ecuador is trying to sell some 2 million barrels of oil confiscated from Perenco, and the only bidder so far has been Petroecuador, Ecuador's state oil company.
Perenco extracts 22,000 barrels of oil per day from Ecuador's Amazon jungle, or around 4.5 percent of the country's total output, which amounted to 486,000 barrels per day in May.
Burlington Resources, a subsidiary of ConocoPhillips (COP.N), has stakes in the two fields operated by Perenco in Ecuador.
Perenco launched a suit against Ecuador and Petroecuador last year to dispute the legality of the windfall tax, saying the levy violates its contract.
The World Bank's International Center for Settlement of Investment Disputes accepted a request from Perenco in May to block any forceful collections until the center rules on the legality of the windfall tax.
Ecuador hiked the tax to 99 percent from 50 percent in 2007 as a way to pressure foreign oil companies to rework their extraction deals, but later lowered the tax to 70 percent.
Leftist Ecuadorean President Rafael Correa, an ally of Venezuelan leader Hugo Chavez, is trying to increase state revenue from the oil sector, but has so far shied away from nationalizing companies.
Ecuador has seized the bulk of Perenco's production since March in a bid to collect more than $350 million it says the company owes in windfall taxes.
"The suspension will start tomorrow, Thursday 16, at midday Quito time (1700 GMT)," the company's Latin America manager Rodrigo Marquez said in a telephone interview.
"It's going to be something temporary because we are going to keep our personnel there, in the hope that the government backtracks," Marquez said.
In a statement on Wednesday evening Ecuadorean oil minister Germanico Pinto called Perenco's decision "illegal, unilateral and arbitrary", and said the government will take "the necessary measures" to guarantee the interests of the state.
Ecuador is trying to sell some 2 million barrels of oil confiscated from Perenco, and the only bidder so far has been Petroecuador, Ecuador's state oil company.
Perenco extracts 22,000 barrels of oil per day from Ecuador's Amazon jungle, or around 4.5 percent of the country's total output, which amounted to 486,000 barrels per day in May.
Burlington Resources, a subsidiary of ConocoPhillips (COP.N), has stakes in the two fields operated by Perenco in Ecuador.
Perenco launched a suit against Ecuador and Petroecuador last year to dispute the legality of the windfall tax, saying the levy violates its contract.
The World Bank's International Center for Settlement of Investment Disputes accepted a request from Perenco in May to block any forceful collections until the center rules on the legality of the windfall tax.
Ecuador hiked the tax to 99 percent from 50 percent in 2007 as a way to pressure foreign oil companies to rework their extraction deals, but later lowered the tax to 70 percent.
Leftist Ecuadorean President Rafael Correa, an ally of Venezuelan leader Hugo Chavez, is trying to increase state revenue from the oil sector, but has so far shied away from nationalizing companies.
