May 14, 2009 / 9:28 PM / 10 years ago

Ecuador to move ahead with Perenco's oil sale

QUITO, May 14 (Reuters) - Ecuador will move ahead with the auction of 1.4 million barrels of crude seized from French oil company Perenco despite a foreign court order to halt the sale that stems from a tax row, a top official said on Thursday.

Ecuador’s state oil company, Petroecuador, will auction the crude on Friday to start collecting more than $300 million owed by Perenco over a controversial windfall tax.

Alexis Mera, the government’s top legal adviser, said the government was going to carry out the auction despite a World Bank tribunal order to suspend the sale until it decides on the legality of the windfall tax.

“The auction will be carried out tomorrow because the (auction) process had already started,” Mera told reporters.

“We still strive to reach an agreement with them (Perenco).”

OPEC member Ecuador seized part of Perenco’s production in March after the government failed to reach an agreement with the company to settle the pending debt.

Perenco launched an international suit against Ecuador and its state oil company, Petroecuador, last year to dispute the legality of the windfall tax it argues violates its contract.

Ecuador hiked the windfall tax to 99 percent from 50 percent in 2007 as a way to pressure foreign oil companies to rework their extraction contracts. Ecuador later lowered the tax to 70 percent.

Most companies have agreed to pay late taxes and negotiate a new service deal in which the state would keep all the oil they produce in exchange for an extraction fee.

Perenco extracts around 27,000 barrels per day from the Coca-Payamino oilfield and blocks 7 and 21 in Ecuador’s Amazon jungle. (Reporting by Jose Llangari, writing by Alonso Soto; editing by Jim Marshall)

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