President Rafael Correa of Ecuador shocked investors in October
by raising the windfall tax from 50 percent to 99 percent, grabbing
nearly all the extra oil revenues generated by foreign firms above
a set contractual price.
This has had a huge impact on PetroChina, Sinopec and Sinochem;
they all have investments in Ecuador. It's reported that PetroChina
and Sinopec are preparing to seek help from international
arbitration organizations. Sinochem has a US$200 million investment
in Ecuador; the company is also preparing to renegotiate their
contracts.
According to Xinhua News Agency, Correa arrived in Beijing on
Monday for a week long state visit. Senior officials from
PetroChina and Sinopec are expected to meet the Oil Minister of
Ecuador to discuss the oil tax. However, insiders said that it is
not likely that the Ecuadorian side will compromise.
For more details, please read the full story in Chinese (
http://www.dfdaily.com/node2/node27/node260/userobject1ai40994.shtml).
(China.org.cn November 23, 2007)
