"We've canceled five contracts," Natural Resources Minister Wilson Pastor said late Tuesday.

The five canceled deals include two with Brazil's Petrobras, and one each with South Korea's Canada Grande, China's CNPC Amazon and the United States' EDC, he said.

Ecuador's leftist government of President Rafael Correa in August began renegotiating 33 foreign oil contracts following a July 26 law reforming the oil sector to give Ecuador 100-percent ownership of its crude oil production.

Under the renegotiated deals, foreign companies now have oil industry services contracts that give Ecuador 85-90 percent share of their oil income, up sharply from under 20 percent just a few years ago.

The final contracts are to be ironed out by January 23, 2011.

Pastor said the major oil companies that successfully renegotiated their contracts with Ecuador included Chile's ENAP, Spanish-Argentine Repsol-YPF, China's Andes Petroleum and PetroOriental, and Italy's ENI.

Under the terms of the new law, Ecuador will liquidate investments made by companies that fail to renegotiate their contracts, with Ecuador's state-run Petroamazonas taking over all their drilling operations.

"The cancelled contracts represent 14 percent of Ecuador's (oil) production," Pastor said. "Eighty-six percent of production has been either renewed or increased."

As an example, the minister cited Repsol-YPF, which pumps more than 41,000 barrels of oil per day (bpd). Under the new agreement, the company's area of operations have been reduced from 200,000 hectares to 150,000 (from 49,400 acres to 37,000).

Repsol-YPF has also agreed to invest 282 million dollars in its production facilities and 11 million dollars in oil exploration projects, Pastor added.

Chile's ENAP, he said, signed two deals and pledged a 72 million dollar investment from now to 2025. The company was expected to leave Ecuador with more than one billion dollars in profits in that same period.

The new law also forces foreign oil companies to make hefty investments in the country's oil infrastructure, which under the new contracts amount go 1.2 billion dollars up to 2025.

One of just two Latin American members of the Organization of Petroleum Exporting Countries, along with Venezuela, Ecuador currently produces 481,000 barrels per day, including 192,400 barrels extracted by foreign firms.

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