15 Feb 2009

Ecuador to freeze oil company assets

1:14 pm on 15 February 2009

Ecuador is to freeze the assets of two foreign oil companies over demands for taxes.

President Rafael Correa said on Saturday that Repsol of Spain and Perenco of France owe hundreds of millions of dollars stemming from a windfall tax imposed in 2007.

The government has previously said that Repsol owes around $US500 million in taxes.

A senior government official said that under Ecuadorean law, the state has the right to temporarily seize assets and freeze bank accounts to force a company to pay debts.

President Correa has repeatedly threatened to expel oil companies to put pressure on them to sign new deals that give the state a bigger share of their revenues.

Repsol and Perenco installations include drilling rigs, machinery and shares in a privately owned pipeline.

Repsol operates three oilfields in the Amazon jungle with a production capacity of 65,000 barrels per day. According to government data, Perenco produces nearly 30,000 barrels per day.

President Correa faces reelection on 26 April.