Ecuador Declares State of Emergency on Former Oxy Ops
Ecuador's President Alfredo Palacio has declared a state of emergency on block 15 and other assets formerly operated by US oil company Occidental (NYSE: OXY), the presidential website reported.
The state of emergency will allow state oil company Petroecuador to avoid the paperwork associated with public company operations - for example, tender processes - and concentrate on operating the assets, a Petroecuador spokesperson told BNamericas, confirming local press reports.
Production levels remain roughly at the normal 100,000 barrel-a-day level.
The company will operate under the state of emergency until a special committee selects a state-owned company to operate the assets, the spokesperson said. The committee was appointed by presidential decree on Monday.
Chile's state oil company Enap, Brazil's Petrobras (NYSE: PBR) and China's Sinopec as well as Indian and Russian state-owned companies have expressed interest in the block, with Colombia's Ecopetrol interested in providing technical assistance, the spokesperson said.
Ecuador expropriated Oxy's assets alleging the US company transferred a 40% stake in block 15 to Canadian oil firm EnCana (NYSE: ENC) in 2000 without government permission, overproduced some wells and did not comply with the block's investment plan.
Oxy responded by filing an arbitration claim with the International Center for Settlement of Investment Disputes (ICSID).
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