Ivanhoe says Ecuador happy with Pungarayacu contract

Tuesday, April 27, 2010
Ivanhoe says Ecuador happy with Pungarayacu contract
April 27, 2010 | 11:19

Ivanhoe Energy said the Ecuadorean government is happy with the way it is developing the massive Pungarayacu oil field and its contract may form the model for other foreigners wanting to operate in the country.

Ecuador’s President Rafael Correa last week threatened to nationalize foreign oil operations unless they sign contracts boosting state control in the sector.

His comments followed moves by other Latin American nations to gain more control over their resources sector. Venezuela’s socialist President Hugo Chavez in 2007 nationalized multibillion-dollar oil projects and forced ExxonMobil and ConocoPhillips out of the country.

Ivanhoe’s Pungarayacu contract, signed in 2008, provides for the company to be paid a fixed fee for every barrel produced and delivered to a local pipeline. The fee is linked to a basket of three US producer price indices.

“Since signing this contract, Ivanhoe Energy Ecuador has been advised by senior Ecuador Government officials that they are pleased with the form and approach of the Block 20 Pungarayacu contract,” it said in a statement.

More:
http://money.canoe.ca/money/business/canada/archives/2010/04/20100427-111900.html

I noticed the article says the field was discovered 30 years ago. Apparently Ivanhoe hasn't really spent a lot of money yet. So the question is, will they spend the real cash when the time comes?