Ecuador prepares to renegotiate contracts

President Alfredo Palacio’s government will ask the French Institute of Petroleum to assist in renegotiating contracts with foreign oil companies to give the Andean nation a greater share of petroleum profits, his energy minister said.

With the help of the French Institute, Ecuador hoped that the country might begin contacting oil companies in October to schedule talks.

Palacio has said he wants to increase Ecuador’s share of royalties and income tax on petroleum profits from the current 20 percent to 50 percent.

Rodriguez pledged the government would “respect legal security in a negotiation that will not be traumatic, a negotiation of mutual accord.”

“To that end, we have had preliminary negotiations with representatives of the petroleum companies to let them know our desire is to do a very objective, very professional job,” he added.

High oil prices not in current deals

In the same press conference, the president of state-run Petroecuador, Luis Roman, said that it was impossible to say whether Ecuador would be able to achieve a 50-50 split that Palacio’s government seeks, given the complexity of renegotiating deals with some 19 transnational companies that operate in the country.

Ecuador produces about 535,000 barrels of crude daily, taking into account state and private production. Oil income provides about 43 percent of the government’s operating budget.

—The Associated Press