Ecuador voids foreign production oil contract

22nd July 2010, Comments 0 comments

Ecuador Thursday voided oil production contracts with the Franco-British firm Perenco and its US partner Burlington, in a move expected to lead to the takeover of the company's wells and assets in the country.

Perenco had suspended production in Ecuador in July last year in protest against government seizure of its oil to pay 327 million dollars in back taxes.

Natural Resources Minister Wilson Pastor announced the government's latest move, citing an Ecuadoran law that allows it to declare a contract void if an oil contractor suspends production for 30 days "without just cause."

The measure suggests that Ecuador, a member of the Organization of Petroleum Exporting Countries, will assume ownership of Perenco's wells and other assets.

Perenco and Burlington produced 21,365 barrels a day.

© 2010 AFP

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