Palacio Inks Decree to Up Petroecuador Take of Windfall Revenue

Ecuador's President Alfredo Palacio has signed a decree to establish a regulation framework for the hydrocarbons law that would grant state oil company Petroecuador at least 50% of windfall revenues from local oil production, the government said in a statement.

Windfall revenues are defined as the difference between monthly revenue generated with current oil prices compared to the income that would have been generated using reference prices.

Reference prices will be established in agreements signed with the state and will vary from company to company, according to the statement.

The decree will come into effect when published in the country's official register, after which companies will have 60 days to sign the complementary agreements.

Companies failing to do so within the allotted time will be required to provide Petroecuador at least 60% of windfall revenues, according to the statement.

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