QUITO (Reuters) - Ecuador wants to negotiate a payment plan with oil service companies owed more than $2 billion and expects to begin talks with main creditor Schlumberger in coming days, its new oil minister told Reuters on Wednesday.
Ecuador’s economy has struggled since the 2014 collapse of oil prices and a devastating earthquake last year that killed some 670 people and cost an estimated $3 billion.
The smallest member of OPEC has built up debts for oilfield services that Schlumberger, which is owed about $1 billion, has described as causing “considerable financial stress.”
Oil Minister Carlos Perez, a former Halliburton executive named by new President Lenin Moreno this month, expressed confidence the situation would be resolved.
“In the case of Schlumberger it is a holistic conversation, in which we will review rates, part of the debt with them, and additional investments,” he said in an interview in his office in the mountainous capital Quito.
Perez said the conversations would probably start this week.
“We have to reach payment agreements with companies, be it with (central bank notes) or other types of bonds, and another part in cash,” he said.
Ecuador last month gave Schlumberger $150 million in central bank notes that can be used to pay taxes, as part of efforts to pay down its debt with the company.
Ecuador also has debts with Halliburton, Sinopec and smaller local providers, Perez said.
A Schlumberger spokesperson said the company was optimistic about the Moreno government and open to negotiation of contracts but that it expected proof that debt that has accumulated over 22 months will be paid.
The Andean country also wants to propose a broad renegotiation of contracts with service companies, based on international crude prices, to stimulate investment, Perez said.
“One of the things we’re trying to include is indexing the contracts to the WTI prices,” he said.
Perez also expects oil production in Ecuador to ramp up to about 700,000 barrels per day, up from around 535,000 bpd currently, in the next four years. He cautioned that would depend on the scale of investments.
Reporting by Alexandra Valencia; Writing by Alexandra Ulmer; Editing by Sandra Maler and Bill Trott