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News // Oil and gas worldwide

Ecuador President Correa ready to nationalize country's oil sector

19 April 2010 , 08:34Agencies3154

 

Correa said he will introduce legislation under which foreign oil companies will face nationalization if they fail to sign contracts acceptable to Quito. Ecuador's President Rafael Correa said Saturday he will introduce legislation under which foreign oil companies will face nationalization if they fail to sign contracts acceptable to Quito. "We are sending the (Legislative) Assembly a bill that would give me the authority to expropriate oil fields if these oil companies do not want to sign new contracts on the services they are providing," Correa, a leftist and an economist by training, said in his weekly address.

 

"Every day that passes there are millions of dollars going to these companies that should be going to the Ecuadorean state," Correa said during a televised address. "I'm out of patience," he said. "We are sending a bill to Congress that would allow for the expropriation of oil fields should the companies not want to sign the new contracts." Spain's Repsol, Brazil's Petrobras, Chinese consortium Andes Petroleum and Italy's Eni operate in the Andean country.

 

Ecuador, which is aiming to eventually have full state control over the industry, currently offers foreign owners the possibility of signing deals under which Quito pays operating expenses and set the profits that international companies will receive. Under an old model, prior to Correa's government, foreign firms obtained as much as 80 percent of the crude they pumped.

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