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Ecuador moves toward control of oil output
Quito, Ecuador (UPI) Jun 18, 2009 Oil provides Ecuador with around half its export earnings, but its populist President Rafael Correa has vowed to take greater control over the nation's natural resources. Using a swearing-in ceremony of his new oil and mining minister to lay out his intentions, Correa threatened to crack down on all multinational oil companies "that still believe they can continue to abuse our country." The government would radicalize the ongoing "citizen revolution," he said Monday as Germanico Pinto, the new minister, stood by, and this means he will demand international "respect for our country." The president said he tasked Pinto, who was deputy minister of strategic areas, to take "a firmer posture" with private oil companies that "refuse to pay taxes, take us to arbitration process, start international claims against us and request million-dollar compensations." He was referring to unresolved disputes with a number of foreign oil companies that have resorted to international arbitration against the government over issues ranging from the seizure of oil production to arbitrary taxes. Pinto replaced Derlis Palacios, who resigned after failing to resolve several key disputes with these companies. In one dispute, oil and gas company Perenco SA declined to pay $338 million in taxes after the Ecuadorian government imposed a windfall oil earnings tax of 99 percent in 2007. Perenco took the case to the World Bank's International Center for Settlement of Investment Disputes, claiming the windfall tax violated its contract. But the government responded by seizing 70 percent of Perenco's output. In another case put before the ICSID, Occidental Petroleum Corp. is claiming $1 billion in compensation for oil fields that were seized in 2006. Other extractive industries have appealed to the ICSID, prompting Ecuador on May 31 to complain that the institution was biased toward Western corporations and threatening to withdraw from it. Meanwhile, Ecuador is trying to rework other oil deals to increase its control over the lucrative sectors. At the same time the government intends to increase its metallic mineral output, which presently is minimal. By doing so the government hopes to open the door to a potentially lucrative and underdeveloped industry, which it thinks could generate around $110 billion. But Pinto's warning Monday that he will promote "a deep change in how we have been developing productive activities as well as energy and environment activities" does not encourage the multinationals. Oil and gas analyst BMI said it expects the government to try to restrict oil operators to the role of service providers to state-run Petroecuador, which will drive foreign oil firms away from Ecuador, leaving an industry of national oil companies and small independent firms. Share This Article With Planet Earth
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Iraqis feud over foreign oil contractsBaghdad (UPI) Jun 18, 2009 As the Iraqi government moves toward naming 35 foreign oil companies to be awarded long-awaited contracts to operate some of the richest oil fields in the world, many in the country's oil industry are up in arms because they fear Big Oil will have too much control over the nation's greatest treasure. "The service contracts will put the Iraqi economy in chains and shackle its independence ... read more |
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