Oil report

Ecuador says to form $1.1 bln oil firm with China

QUITO, Nov 24 (Reuters) - The state petroleum companies of Ecuador and China will form a joint firm to develop oil fields in Ecuador’s Amazon region, a project that will require about $1.1 billion in Chinese capital, Ecuador said on Tuesday.

“The forming of the company implies an investment of $1.1 billion, which is very important for Ecuador and will help us develop our oil industry,” Germanico Pinto, the government’s minister of nonrenewable natural resources, told Reuters.

The principal aim of the joint company, to be formed in the days ahead and “basically” financed by China, will be to explore and drill in the Oglan block in the Ecuadorean jungle, Pinto said.

The company will be 60 percent owned by Ecuador and 40 percent owned by China, he said.

Oil-hungry China has become a key strategic ally of Ecuador, a member of the Organization of the Petroleum Exporting Countries.

The countries have a signed a separate $1 billion oil-for-cash deal and are in a joint project to develop a hydroelectric dam in the Andean country.

Ecuador is set to take over the rotating presidency of OPEC next month. Pinto said the oil exporters’ group has not considered changing its production limits, but is watching prices carefully as the world economy pulls out of its crisis.

“Until now there has been no talk of changing OPEC production,” Pinto said. (Reporting by Santiago Silva; Editing by Walter Bagley) ((;+ 593 22 523 560)) ((For help: Click “Contact Us” in your desk top, click here [HELP] or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training:; +1 646-223-5546))