Ecuador's state-run oil company, Petroecuador, may cancel a contract with a unit of oil and gas producer Noble Energy due to Noble's alleged failure to have its investment plan properly approved by authorities in Ecuador. Energy Development Corp., the Noble unit in question, reduced its development plan to $230 from $603 million rather than increasing it, according to press reports.
Noble (NBL) has been doing business in Ecuador via Energy Development Corp. since 1996 under a contract that runs until 2036. EDC produces natural gas which powers about 6% of Ecuador's electricity needs, the press reports said.
Ecuador's leftist government has been less than warm toward foreign oil firms operating there, going so far as to say the companies should invest heavily in the country's oil fields or leave. The government is likely to do away with profit-sharing deals in favor of services contracts, press reports noted.
Ecuador, an OPEC member, raised its possible and probable crude reserves by 120.4 million barrels in 2009 on Tuesday. The country produces about 465,000 barrels of crude per day.