Ministry: US$838mn in Revenue from Oxy Assets for 2006

Ecuador's economy and finance ministry expects the country to receive US$838mn in gross revenue through 2006 from the sale of crude produced on block 15, formerly operated by US oil company Occidental (NYSE: OXY), according to a ministry presentation.

The block produces some 100,000 barrels a day and was expropriated on the grounds that the US company allegedly 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.

State oil company Petroecuador earned some US$140mn from the first month's sale of crude from block 15, a Petroecuador spokesperson told BNamericas.

In addition, the ministry expects US$341mn in gross revenue by year-end from the application of the new hydrocarbons reform law to give the state 50% of windfall revenues from local oil production.

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

The expected state take in 2006 would be equal to US$256mn after tax considerations, according to the presentation.

The ministry also announced its plans to form the FEISEH fund for investment in the energy and hydrocarbons sectors, which will focus on new social investments, the Petroecuador spokesperson said.

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