Petroecuador Calls Auction For Seized Perenco Crude Oil
22 April 2009 - 12:41AM
Dow Jones News
Petroecuador said Tuesday it will next month sell the 720,000
barrels of Oriente Crude and 720,000 barrels of Napo Crude seized
from French company Perenco.
In a published statement on Tuesday, Petroecuador said that the
Oriente Crude will be sold in two cargoes of 360,000 barrels each,
while the Napo crude will be sold in one cargo.
The Oriente crude has 24 API grades while the Napo has between
18 and 19 API grades.
The oil, to be sold May 15, will be awarded to the buyer who
presents the best offer.
The government of President Rafael Correa has been unable to
reach an agreement with Perenco, which owes around $358 million in
unpaid windfall taxes, according to the government.
Mining and Oil Minister Derlis Palacios has said Perenco wants
to reach an agreement, but its partner, Burlington Resources Inc.,
doesn't want to.
Burlington Resources is a unit of ConocoPhilips (COP).
A previous administration decreed that when oil prices rose
above those set out in operating contracts, the government's share
of the excess would be 50%.
Correa's administration raised the government's share to 99% in
October 2007. Private companies said the windfall tax makes their
businesses unprofitable.
Perenco produces around 28,000 barrels per day. It operates
blocks 7 and 21 in Ecuador's Amazonas region.
Early last month, Palacios said Ecuador's government would seize
Perenco's oil production and sell it until back windfall taxes are
paid.
Palacios also has said Ecuador won't seize Perenco's oil fields,
goods or offices and the company can continue operating, but the
output will be taken for the state while the debt is being
paid.
Burlington has initiated arbitration proceedings at the
International Center for Settlement of Investment Disputes.
-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653;
mercedes.alvaro@dowjones.com