UPDATE 2-Ecuador's Correa to sign oil deals in a month

Wed Jun 18, 2008 10:10am EDT

QUITO, June 18 (Reuters) - Ecuadorean President Rafael Correa said on Wednesday he hoped foreign oil companies would sign new temporary contracts in one month, in an effort to lift stalled production in the key sector.

Ecuador wants oil companies to downgrade their status as joint ventures to only contractors within a year. It also has offered them a tax cut in exchange for dropping lawsuits filed against the government over a controversial windfall tax.

"We hope in a month to sign modified contracts and in a year from that date to have service contracts," Correa told a local television station in an interview.

Ecuador wants companies to switch from contracts that allow them to keep part of the oil they extract to deals in which the state would keep all the crude and pay firms a service fee.

During the weekend Correa said most foreign companies already had agreed to sign temporary deals, but no company has yet commented on the proposal.

No company was available to comment on Wednesday.

Ecuador is renegotiating contracts with Spain's Repsol (REP.MC: Quote, Profile, Research, Stock Buzz), Brazil's Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz), China's Andes Petroleum consortium and France's Perenco.

Some of those companies and their minority partners have sued Ecuador in international courts over a windfall tax they say makes their business inviable.

Ecuador, a member of the Organization of Petroleum Exporting Countries, produces around 500,000 barrels of oil per day, of which nearly half is extracted by private firms and the rest by the state oil company. (Reporting by Alonso Soto; Editing by Walter Bagley)