Ecuador: Wilson Pastor says Perenco contracts are nixed

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The announcement was made at a press conference today in Quito.

In September last year the Ecuadorian government began a process to cancel Perenco's oil contracts in Ecuador, arguing the company hadn't fulfilled its obligations in the country, Dow Jones reported.

Perenco operated two oil blocks in Ecuador's Amazon region, along with ConocoPhillips's Burlington Resources.

The consortium lost control of the blocks in July of last year when state-owned Petroecuador took over after a tax dispute.

Petroamazonas, a Petroecuador unit, took over operations at the Perenco oilfields after Perenco ordered a suspension of production.

Ecuador called Perenco's decision to suspend operations "illegal, unilateral and arbitrary," while Perenco has said that Ecuador's decision to take its fields constitutes an "expropriation" of Perenco and Burlington's investments.

Perenco is not the only company that Ecuador has moved against. In May 2006, the government canceled a contract held by Occidental Petroleum, after nearly two years of legal disputes, and seized its fields.

Occidental Petroleum is seeking $3.2 billion in damages.