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)
