QUITO (Dow Jones)--Private oil companies operating in Ecuador will continue contract negotiations next week with the Minister of Non-renewable Natural Resources, Wilson Pastor, state news Agency Andes said late Monday.
In an interview with Andes, Pastor said his main priority as minister will be to end the current production-sharing deals and replace them with service contracts.
To reach this goal, the government will send to the National Assembly in the "short term" changes to the hydrocarbons law that basically establish a deadline to sign the new contracts.
"It won't be an integral reform. We will go to the urgent issues. There will be deadlines to sign the new contracts," Pastor said.
Through services contracts, oil companies will be paid a production fee that includes a reimbursement for investment costs, while the government will own 100% of oil and gas produced.
According to Pastor, the service contracts will commit the private oil companies to increasing oil production and maintaining necessary investments.
The minister also said companies like Italy's Eni SpA (E, ENI.MI) and Spain's Repsol YPF SA (REP) are fulfilling their investment plans in Ecuador, but companies like Brazil's state-run Petroleo Brasileiro SA (PBR), in its oil block 18, and China's Andes Petroleum Co., in the Tarapoa oil block, haven't decided on investment levels.
Last week Pastor took over as Ecuador's Minister of Non-renewable Natural Resources, replacing Germanico Pinto, who was removed by President Rafael Correa due to his slow progress in making the change from production-sharing contracts to services contracts.
Correa has threatened to expropriate oil fields from foreign firms if they refuse to switch their current contracts.
-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@dowjones.com
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