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Oil & Gas

Ecuador Threatens to Take Over Foreign Oil Companies

April 19, 2010
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President Rafael Correa said Ecuador will move to take over the operations of foreign oil companies in the country unless they sign new contracts agreeing to increase state control over the sector, reported by Reuters. The government wants foreign oil operators to give up profit-sharing deals and sign new contracts under which they would become service providers. The negotiations over the new contracts are progressing slowly and Correa said his government will propose legislation to force the issue; also saying Ecuador needs to increase control over its own natural resources. In a televised address Correa said, "I''ve run out of patience. We are sending a bill to Congress that would allow for the expropriation of oil fields if the companies not want to sign the new contracts." Correa has sided with plaintiffs in the Amazon region of the country who are suing U.S. oil company Chevron Corp for $27 billion in environmental damages. He also threatened to nullify an arbitration ruling against his government in its feud with the oil giant.
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