QUITO, Oct 18 (Reuters) - Ecuador signed a temporary oil extraction deal with Brazil's Petrobras that lowers the company's tax burden, President Rafael Correa said on Saturday, as part of the OPEC nation's drive to boost control over the key sector.
A production sharing contract with Petrobras gives Correa more time to negotiate service deals that would allow the state to keep all the oil that companies extract. It also eases tensions with ally Brazil over recent threats to nationalize the company's oilfields if a deal was not signed.
'Yes, Petrobras has agreed,' Correa said. 'These transition contracts will lead to service deals in about a year.'
Correa, a leftist former economy minister, frayed ties with left-leaning Brazil after he ejected Brazilian constructor Odebrecht over a disputed dam in September.
Correa, who won a September referendum to increase his control over the economy, has struggled for nearly a year to convince foreign companies to renegotiate deals that allowed them to directly sell some of the oil they extracted in Ecuador.
Protracted talks has slashed private investment in the country's oil sector, which is crucial for the state's finances.
The U.S.-trained economist said French oil company Perenco also agreed to the temporary deal that immediately lowers a windfall tax that companies have said made their business unprofitable in the Andean country.
Spain's Repsol is also planning to ink the transition deal next week, Correa said.
Details of the Petrobras agreement were not immediately known. Petrobras is one of the country's largest investors and produces around 35,000 barrels per day.
A Petrobras spokesman declined to comment on the new agreement. Repsol and Perenco officials were not immediately available for comments.
(Reporting by Alonso Soto) Keywords: ECUADOR PETROBRAS/ tf.TFN-Europe_newsdesk@thomson.com ak COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
A production sharing contract with Petrobras gives Correa more time to negotiate service deals that would allow the state to keep all the oil that companies extract. It also eases tensions with ally Brazil over recent threats to nationalize the company's oilfields if a deal was not signed.
'Yes, Petrobras has agreed,' Correa said. 'These transition contracts will lead to service deals in about a year.'
Correa, a leftist former economy minister, frayed ties with left-leaning Brazil after he ejected Brazilian constructor Odebrecht over a disputed dam in September.
Correa, who won a September referendum to increase his control over the economy, has struggled for nearly a year to convince foreign companies to renegotiate deals that allowed them to directly sell some of the oil they extracted in Ecuador.
Protracted talks has slashed private investment in the country's oil sector, which is crucial for the state's finances.
The U.S.-trained economist said French oil company Perenco also agreed to the temporary deal that immediately lowers a windfall tax that companies have said made their business unprofitable in the Andean country.
Spain's Repsol is also planning to ink the transition deal next week, Correa said.
Details of the Petrobras agreement were not immediately known. Petrobras is one of the country's largest investors and produces around 35,000 barrels per day.
A Petrobras spokesman declined to comment on the new agreement. Repsol and Perenco officials were not immediately available for comments.
(Reporting by Alonso Soto) Keywords: ECUADOR PETROBRAS/ tf.TFN-Europe_newsdesk@thomson.com ak COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.