RE: Seisure of a oil concession...Canadian group faces claim after Ecuador's seizure of oil assets
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May 20, 2006
The Times
By Elizabeth Judge
ENCANA, Canada's biggest petroleum explorer, has become the latest company to be embroiled in the wave of nationalisations sweeping the South American energy and mining sector.
Calgary-based EnCana said it faced being forced to refund up to 20 per cent of the $1.42 billion (Pounds 756 million) a Chinese joint venture paid for its Ecuador holdings after the Government of the South American country seized some of the assets.
EnCana said that Andes Petroleum, a group led by PetroChina parent CNPC, could recover up to $284 million after it made a claim for damages yesterday.
The Ecuador properties, sold earlier this year, included a 40 per cent stake in Block 15, a property that had been owned by Occidental Petroleum, the US oil giant, until the Ecuador Government stripped the company of its assets earlier this week in a dispute over the sale of a stake to EnCana.
Government officials claimed that the move to seize Occidental's assets was not part of a move to nationalise the oil industry.
But the move took place against a backdrop of uncertainty in the South American energy and mining sector, where nationalists in government are pushing for more control.
Earlier this month Bolivia nationalised its oil and gas industry.
A spokesman for EnCana said: "Since the Government of Ecuador has seized ownership of a block that was sold, compensation is a possibility."
The amount of any payout was "not deemed to be material to EnCana", the spokesman said.
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BTW who was the President of Ecuador when this Occidental Problem happened? Was it Correa.....NO! It was Noboa!!!