Wednesday, April 21, 2010

Correa says may nationalize Ecuador oil operations

By Stabroek staff | April 21, 2010 in Regional News CARACAS (Reuters) – Ecuador could nationalize operations of foreign oil companies unless they sign contracts that increase state control in the sector, President Rafael Correa said in an interview on broadcast yesterday.

“I am preparing a law to facilitate expropriation and nationalizations,” Correa told cable news network Telesur. “With this instrument we will do what we have to in the right moment.”

At the weekend, Correa said the law would allow the government to take over oil operations but he did not specify that the takeovers could be permanent nationalizations.

The leftist president says OPEC-member Ecuador needs to increase control over its own natural resources.

The government wants foreign oil operators to give up profit-sharing deals and sign new contracts under which they would become service providers. Talks over the new contracts are progressing slowly and some say Correa’s tough stance could be a negotiating tactic.

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 push for state control over oil and minerals in Latin America is being spearheaded by Venezuela’s socialist leader Hugo Chavez. It also remains politically potent in Bolivia.

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