The state-owned oil company Petroecuador today took over 100% of the oilfields belonging to U.S. transnational Occidental Petroleum (Oxy), after declaring that the company's contract with the State had expired, PL reported.
The U.S. oil company informed the previous evening that it had transferred all of its Block 15 operations to Petroecuador's control, and this Thursday a team of technicians will go to the wells of Limoncocha, in Sucumbíos province, to take over activities in those facilities.
According to Attorney General José Maria Borja, the official transfer was to go into effect this afternoon (May 18), given that the declaration of expiry becomes effective three days after it has been announced.
Fernando González, Petroecuador's president, said that the company's workers are trained to take over Oxy's fields and wells, although financing is needed.
In that respect, Energy Minister Iván Rodríguez, affirmed that resources generated by Oxy's production would be managed by the Ministry of Economy.
The Ministry of Economy has transferred more than $61 million to Petroecuador to date this year for financing fuel and other operating costs.
Diego Borja, minister of economy, emphasized that his ministry had assessed the investment, and that funds would be delivered so that production is not held up in what were formerly the fields of the US corporation.
Oxy presented an international lawsuit for arbitration against the Ecuador government for declaring the expiry of their contract after Oxy failed to request authorization in 2000 for transferring its stocks to Encana.
Enrique Proaño, the president's press secretary, warned that "this demand is groundless, because Ecuador has enforced the law."
National lawyers and experts warned that the action by Oxy lacks validity, given that Article 8 of their investment agreement excludes the possibility of arbitration when domestic laws are violated.