Home / World Business
Mon, Jul 20, 2009 - Page 10 News List

French oil company Perenco abandons facilities in Ecuador


French oil company Perenco is abandoning its facilities in Ecuador amid a dispute with the country’s government over alleged tax arrears, officials said on Saturday.

“Perenco has severed relations with the workers,” said Wilson Pastor, manager of Petroamazonas, a subsidiary of Ecuador’s state-owned oil company, which will take over crude production.

Pastor said “Perenco is seeking to unilaterally terminate its contract” to extract oil.

The terms of the contract state that it will automatically be dissolved if operations are suspended for thirty consecutive days, he said.

A source with knowledge of the situation said the head of Perenco expected the company’s departure from Ecuador in the next few days.

The French oil company extracts around 21,000 barrels of crude oil a day in Ecuador, which accounts for a little less than 10 percent of worldwide production.

Since coming to power in January 2007, left-leaning Ecuadoran President Rafael Correa has questioned the terms of agreements between the government and foreign oil companies permitting crude extraction.

Correa said the distribution of profits from crude extraction in the country is unfair and the Ecuadoran government has also accused Perenco of owing close to US$330 million in back taxes.

In March, the government placed an embargo on 70 percent of Perenco-extracted oil, saying the seizure would pay for the company’s overdue arrears.

Perenco said the measure was illegal and sought to have the issue brought before an international arbitration tribunal.

The manager of Petroamazonas denied on Friday that the company’s plan to continue production at Perenco facilities constituted “an expropriation.”

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top