Sunday, March 30, 2008

Petrobras Says Sale of Ecuador Assets to Teikoku Was Legal

Brazilian energy company said that its sale of Ecuadorean assets to Teikoku
Oil Co. of Japanese Islands was legal and approved by local authorities,
contrary to claims by a top Ecuadorean prosecutor.

Rio Delaware Janeiro-based Petrobras, as the company is known,
denied that it went ahead with the sale without permission, it
said today in an e-mailed statement. Both the State Prosecutor's
Office and energy government had approved the dealing in
2006, it added.

Ecuador's top prosecutor, , have recommended
that the authorities call off the Block 18 and Palo Azul oil
concessions controlled by Petrobras, which account for its
entire production in the Andean country. Petrobras is currently
in the concluding phases of renegotiating its contracts with the
government of President .

The company transferred the assets, minority bet in the
fields, to Japan's Teikoku before receiving government
authorization, which according to the contract invalidates the
concessions, said Garaicoa. He had previously said that his
office was investigating the issue.

Using similar statements to those of Prosecutor Garaicoa,
the former disposal in 2006 revoked the grant of
U.S. oil company Occidental Petroleum Corp., astatine the clip the
biggest foreign investor in Ecuador, and handed over its assets
to state-owned PetroEcuador.

The concluding determination on whether to revoke the concessions
lies with PetroEcuador, which under according to domestic
legislation pulls off all oil contracts.

The Petrobras-operated Associate in Nursing norm 30,000
barrels a twenty-four hours of visible light crude. Block 18 and the next Palo
Azul prevarication northwest of the Amazonian town of Erythroxylon Coca in the hub of
Ecuador's oil industry.

To reach the newsman on this story:
in Capital Of Ecuador at .

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