Ecuador to Begin Oil Contract Renegotiations

Ecuador's government plans to start renegotiating oil contracts, the energy and mines ministry said in a statement.

Talks will begin with companies Andes Petroleum, Canadá Grande, Petrooriental, Repsol YPF (NYSE: REP) and Perenco, which "have demonstrated their willingness to begin the process," minister Galo Chiriboga said.

"The philosophy of this renegotiation is to guarantee legal security for the state as well the contracted companies within a negotiated framework that will benefit the oil companies as well as the Ecuadorian state," Chiriboga said.

Ecuador's President Rafael Correa earlier this year created a commission to audit oil contracts with a focus on investigating contractual compliance including operational and environmental performance.

An interdisciplinary team made up of technicians from state oil company Petroecuador's oil-contracting unit, lawyers from the ministry and attorney general's office, the comptroller general and financial analysts will be created for the renegotiation.

The renegotiated contracts will run on average five years, the statement said.

Galo Chiriboga is open to sitting down and talking to international oil companies one by one, René Ortiz-Durán, executive president of Ecuador's hydrocarbons industry association (AIHE), told BNamericas previously.

Chiriboga comes from the previous administration of President Alfredo Palacio and was Petroecuador president.

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