Ecuador's mines and oil ministry and state oil company Petroecuador have submitted a transitory agreement proposal to private oil companies for the conversion of current participation contracts to service provider ones.
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The companies are Repsol YPF (NYSE: REP), Perenco, CNPC, Canada Grande, EcuadorTLC, City Oriente, Petroriental, Andes Petroleum and Petrobras (NYSE: PBR), the ministry said in a statement.
Companies were asked to submit their observations in coming days.
The ministry aims to sign the new contracts within 120 days, the statement said.
The new contracts will be subject to a new extraordinary gains payment structure where 70% of windfall profits will go to the state and 30% to companies, an advisor to minister Galo Chiriboga told BNamericas, clarifying information in the statement.
The new payment structure complies with a tax reform law the constituent assembly approved in January and will be included in all new hydrocarbons contracts signed between the government and companies, the advisor said.
President Rafael Correa last year signed a decree that increased the state's take of extraordinary oil company profits to 99% from 50%. This percentage will remain in place for current contracts and change to the new percentage structure when new contracts are signed, the official added.
