Ecuador to renegotiate oil contracts

QUITO, Ecuador, Nov 28 (Reuters) Leftist Rafael Correa, who is almost certain to become Ecuador's next president, said today he would renegotiate foreign oil contracts to increase the share of crude volume received by the state.

Correa, who made the oil contract renegotiation a key part of his campaign platform, also said he might seek to increase the share of extra oil revenue that private companies are forced to give the state under a recent law.

The hydrocarbons law, approved earlier this year, demands companies share at least 50 percent of extra revenue above a set benchmark with the government. Foreign oil operators have opposed the law as unfair.

Correa, who calls Venezuelan President Hugo Chavez a friend, has rejected any energy nationalization that could trigger jitters among investors and private companies and welcomes foreign investment in the oil sector.

Chavez is a sharp critic of US policy who has sought to forge an alliance of left-wing governments to counter US influence in the region with his own brand of socialist revolution.

Correa, a US-trained economist, appeared close to victory in Sunday's presidential run-off election after exit polls and unofficial counts showed he had surged ahead of his rival.

''Starting January 16th, we will sit down and try to renegotiate the volume, the participation of the state in these contracts,'' Correa told foreign reporters in Quito on Tuesday.

He said the state currently receives 20 per cent of the crude extracted from its soil and his government will seek to boost that share from all companies to around 85 per cent.

He also said his government may seek to increase the share of extra oil revenue received by the state to 85 per cent, to take advantage of high world oil prices, from the current law of at least 50 per cent.

He said the legal dispute with Occidental Petroleum Corp. is a ''closed case'' in which Ecuadorean law was applied.

Ecuador terminated its contract with the Los Angeles-based company and took over its assets in May after accusations that the firm sold part of an oil block without government authorisation. The company has filed an arbitration claim seeking 1 billion dollars in damages and the return of its assets.

REUTERS KR RN2332