EnCana CEO says Ecuador approved block sale

NEW YORK (Reuters) - EnCana Corp. (ECA.TO: Quote, Profile, Research, Stock Buzz) had the blessing of Ecuador's government when it bought an interest in an oil-producing property there owned by Occidental Petroleum Corp. (OXY.N: Quote, Profile, Research, Stock Buzz), EnCana's chief executive said on Wednesday.

Randy Eresman told Reuters Global Energy Summit in New York that his firm would not have purchased the stake in the Ecuador field, since sold, without approval.

"We would not have entered into the agreement without the authorization of the government of Ecuador," Eresman said. "But everyone who's followed the story knows that governments (there) change on a regular basis and it's hard to put a pin in who said what to who when."

Ecuador's government said the sale lacked government authorization and cited the transfer as the reason for seizing Occidental's assets in Ecuador earlier this month. Occidental has condemned the action and on Wednesday filed an arbitration claim against the government, asking for $1 billion in damages and seeking to prevent the government from selling the assets.

Calgary, Alberta-based EnCana, Canada's biggest independent petroleum exploration firm, sold its holding in Ecuador to a Chinese joint venture earlier this year for $1.42 billion. EnCana said last week it may have to refund up to 20 percent of the sale price because of the seizure of the property.

Eresman also told the summit that EnCana has moved forward on its search for a refining partner for its Canadian oil sands business.

The company, which is planning to boost production from its oil sands holdings in northern Alberta to more than 500,000 barrels a day over the next decade, wants one or more refiners to commit to handling the tar-like bitumen from the oil sands. EnCana wants the bitumen turned into more-valuable refined products or upgraded into synthetic crude oil

A list of 20 potential partners has been narrowed by half and a final decision is expected in the third quarter.

"For those that don't have refining capacity in Canada, their typical offer is a supply contract to take the raw bitumen or an agreement to build an upgrader in Western Canada," Eresman said. "We're looking at all those as possibilities."  Continued...