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Ecuador government seeks to end deal with US oil company City Oriente

Ecuador government seeks to end deal with US oil company City Oriente

Ecuador is seeking a deal to end its contract with the U.S. investor-owned City Oriente oil company, Mines and Oil Minister Galo Chiriboga said Monday.
The leftist government wants to negotiate a "mutual agreement" to end its relationship with the firm, with which it considers future business "unfeasible from a technical and financial point of view," Chiriboga said in a news release from the presidential palace.
City Oriente, based in Panama City but owned by U.S. investors, pumps about 3,000 barrels a day in Ecuador _ less than one percent of the country's daily output _ from fields near the Colombian border. Its contract is set to expire in 2021.
President Rafael Correa's government is currently renegotiating the contracts of four other foreign oil companies, in a bid to boost its share of the nation's oil income.
Correa, a close ally of Venezuelan President Hugo Chavez, signed a decree last year that nearly doubled the state's share of windfall oil profits _ earnings on oil sold above prices fixed in company contracts _ to 99 percent.
City Oriente had meanwhile filed a claim with the World Bank's International Center for Settlement of Investment Disputes, contesting back taxes claimed by the government after it boosted its share of extra revenues from 50 percent.
City Oriente officials did not return calls for comment on Monday.
Ecuador is South America's fifth-largest oil producer, churning out an average of 510,000 barrels of crude a day.