UPDATE 1-Ecuador says oil firms want to extend their deals

By Alexandra Valencia

MONTECRISTI, Ecuador, Oct 30 (Reuters) - Ecuador's Oil Minister Galo Chiriboga said on Tuesday foreign petroleum companies want the government to extend the duration of contracts as the state seeks to renegotiate their deals.

The proposals, seen favorably by Chiriboga, are part of the renegotiation talks in which the government wants companies to switch contracts to allow the state to keep the oil instead of sharing and for companies to be paid for services instead.

"These proposals fulfill the government's expectations and, in general, they seek to extend the period of extraction to cover their investment," Chiriboga told Reuters.

President Rafael Correa, a left-wing ally of Venezuela's Hugo Chavez, recently hiked a windfall royalty tax on revenues foreign oil companies earn over a set contractual oil price as he seeks more control over Ecuador's energy resources.

With world oil prices soaring at record levels, companies are more likely to accept harder-line proposals from governments seeking more revenues in deals that are a growing trend among energy producers from Latin America to Africa.

Correa made the oil revenue hike announcement shortly after winning a strong mandate for a popular assembly to rewrite the constitution with proposals he says will curb corrupt elites and strengthen the state's economic control.

The oil tax hike will mean around $700 million a year in less revenue for oil companies. It was the latest policy shift by Correa to worry Wall Street -- the U.S.-trained economist elected last year also wants to renegotiate debt.

Chiriboga did not give details on the other conditions proposed by the energy companies working in Ecuador, who include Spain's Repsol-YPF (REP.MC: Quote, Profile, Research, Stock Buzz), Brazil's Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz) and China's Andes Petroleum.