COP Casino Guichard Perrachon

Casino Guichard Perrachon (AQEU:COP)
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Petroecuador said Tuesday it will next month sell the 720,000 barrels of Oriente Crude and 720,000 barrels of Napo Crude seized from French company Perenco.

In a published statement on Tuesday, Petroecuador said that the Oriente Crude will be sold in two cargoes of 360,000 barrels each, while the Napo crude will be sold in one cargo.

The Oriente crude has 24 API grades while the Napo has between 18 and 19 API grades.

The oil, to be sold May 15, will be awarded to the buyer who presents the best offer.

The government of President Rafael Correa has been unable to reach an agreement with Perenco, which owes around $358 million in unpaid windfall taxes, according to the government.

Mining and Oil Minister Derlis Palacios has said Perenco wants to reach an agreement, but its partner, Burlington Resources Inc., doesn't want to.

Burlington Resources is a unit of ConocoPhilips (COP).

A previous administration decreed that when oil prices rose above those set out in operating contracts, the government's share of the excess would be 50%.

Correa's administration raised the government's share to 99% in October 2007. Private companies said the windfall tax makes their businesses unprofitable.

Perenco produces around 28,000 barrels per day. It operates blocks 7 and 21 in Ecuador's Amazonas region.

Early last month, Palacios said Ecuador's government would seize Perenco's oil production and sell it until back windfall taxes are paid.

Palacios also has said Ecuador won't seize Perenco's oil fields, goods or offices and the company can continue operating, but the output will be taken for the state while the debt is being paid.

Burlington has initiated arbitration proceedings at the International Center for Settlement of Investment Disputes.

-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@dowjones.com