Ecuador Ends Oil Contracts Due to Low Prices

Ecuador's Mining and Oil Minister, Derlis Palacios said current international oil prices made it difficult for his country to benefit, while it was paying high production costs to France's Perenco and Italy's Agip.

Meanwhile, Palacios said Ecuador would fulfill its agreement with OPEC to cut oil production.

OPEC announced in December an oil output cut of 2.2 million barrels per day (bpd) from Jan. 1, the biggest-ever reduction prompted by tumbling prices and a flagging oil market.

Palacios also defended the need to find new export markets such as China, Venezuela, India and Iran.

"We are going to establish Ecuadorian-Iranian companies to exploit oil, which will allow us to have more financing and technology," Palacios said.

Ecuador's oil export revenues accounted for almost 40 percent of the country's budget, totaling about US $14 billion in 2008.

Author: Ksenia Kochneva