Thursday, June 3, 2010

Ecuador 2010 Oil Revenues To Exceed Forecast -Finance Minister

BEIJING -(Dow Jones)- Ecuador expects to receive up to $150 million more revenues from oil sales in 2010 than forecast in the country's budget, despite the recent fall in crude oil prices, the country's finance minister said Thursday.

"We will have more revenues than budgeted for in 2010, between $100 million and $150 million more," Patricio Rivera told Dow Jones Newswires.

"We are concerned about the oil price fall" he said, but noted that the budget was based on an average price of $65 a barrel of benchmark West Texas Intermediate crude oil plus a discount.

After climbing to a peak of more than $88 a barrel at the start of May, the price has since fallen back sharply, dipping below $70. On the New York Mercantile Exchange, WTI light, sweet crude futures for delivery in July traded at $73.25 a barrel at 1030 GMT.

Rivera said that the high price seen in the first three months of the year, combined with what crude futures prices showed and projections for the rest of the year, would result in higher-than-budgeted revenues. He didn't say what the original budget forecast for 2010 oil revenues was.

Ecuador is working on plans with some of the world's largest investment banks on ways of stabilizing its oil income, Rivera said.

"Two or three proposals will be presented soon on ways to cover oil price volatility," he said, but didn't name the banks involved.

He also refused to comment on whether the Organization of Petroleum Exporting Countries, of which Ecuador is a member and is currently president, needed to take action to defend the oil price, on the grounds this wasn't in his area of ministerial competence.

Ecuador's Nonrenewable Natural Resources Minister Wilson Pastor, who is responsible for oil policy, on May 10 said that OPEC expects world crude prices will average between $75 and $80 a barrel this year.

On May 28, the Central Bank said Ecuador's March oil output was 4% lower than a year earlier, at an average of 479,000 barrels a day.

Petroecuador, the national oil company of Ecuador, produced 8.79 million barrels of crude in March, not including shared production with private companies. Private companies' March oil output in Ecuador was 6.06 million barrels.

Rivera also declined to comment on the status of plans to renegotiate oil contacts held by foreign oil companies operating in Ecuador.

The government of President Rafael Correa wants to end the current production- sharing deals and replace them with service contracts.

Rivera earlier Thursday signed a $1.7 billion credit deal with Export-Import Bank of China for a 1,500 megawatt-capacity hydropower project, to be build by China's Sinohydro Corp. some 75 kilometers east of Quito.

-By Simon Hall, Dow Jones Newswires, +86 10 8400-7755;

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