[NYTr] Ecuadorean Govt Changes Oil Contracts

[All the News That Doesn't Fit]

Prensa Latina, Havana
http://www.plenglish.com

Ecuadorean Govt Changes Oil Contracts

      Quito, Oct 8 (Prensa Latina) The Ecuadorean Government proposed a
new contract policy to foreign oil companies on Monday, changing from
shareholding to provision of services.

         Minister of Oil and Mining Galo Chiriboga indicated there is
room to maneuver in the form of the new contracts saying, "if they [the
foreign corporations] think this contractual model is not beneficial,
we should negotiate another;" but it is our proposal to replace
shareholding contracts with contracts of service provision," he
stressed.

         Chiriboga reported in a television interview that the service
agreement, through which companies invoice operation costs plus a
profit margin, since the crude is State property, will be a more
efficient, modern mechanism.

         This form allows a control of investments the companies say
they have undertaken, thus preventing a re-enactment of previous
shareholding agreements under which even Miami-based apartments were
registered as extraction costs," he said.

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