Ecuador will propose legislation to take over operations of oil companies in the country unless the firms sign new contracts aimed at increasing state control over the sector, President Rafael Correa said on Saturday. The government wants foreign oil companies to give up their profit-sharing deals and sign new contracts under which they would become service providers. But negotiations over the new contracts are progressing slowly.
"Every day that passes there are millions of dollars going to these companies that should be going to the Ecuadorian 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, despite Correa's ongoing spats with the private sector. The leftist president says Opec-member Ecuador needs to increase control over its own natural resources. Correa has had a troubled relationship with private investors. He shocked the markets in 2008 by defaulting on $3.2 billion in bonds and has sided with plaintiffs in the Amazon region of the country who are suing US oil company Chevron Corp for $27 billion in environmental damages.
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