Ecuador clashes with foreign oil, again

Ecuador's uneasy relationship with foreign oil firms has again slipped towards threats and recriminations, complicating the smallest Opec nation's production outlook

INTERNATIONAL oil companies (IOCs) are once again in the crosshairs of the Ecuadorian government, which is stepping up state control over the oil sector. Firms that held fast through the last round of brinkmanship, which culminated in a new 99% windfall-profits tax being imposed in 2007, are now being ordered to renegotiate their existing deals to turn them into fee-based services contracts. The country's oil output, which spiked after the 2003 opening of the OCP pipeline removed bottlenecks to exports, has been drifting lower since President Rafael Correa, a close ally of Venezuelan leader Hugo Chavez, assumed the presidency in January 2007. Production slipped to 495,000 barrels a day (b/d)