Occidental Petroleum was weighing its options Wednesday after the Ecuadorean government seized its operations in the oil-rich country and derailed free- trade negotiations, a company official in Los Angeles said.

Occidental, the fourth-largest U.S. oil company based in Los Angeles, is Ecuador's biggest foreign oil producer, accounting for about 14 percent of the tiny South American country's output.

"We view it as an expropriation of assets," said Occidental's Larry Meriage, adding that the Ecuadorean government and the company had been in a contractual dispute for more than two years.

Wall Street debt rating firms said the move would not affect Occidental's financial outlook, as the oil fields in question represent only 7 percent of the company's production.

Occidental, whose holdings were turned over to state-run Petroecuador, has operated in Ecuador since 1995.

"We're the biggest taxpayer in Ecuador," Meriage said.

Occidental, which denied breaking its contract, has sought a tax refund of some 75 million dollars and sought to resolve the conflict via international arbitration, according to Meriage.

U.S. diplomats broke off free-trade negotiations after the Ecuadorean minister of energy announced Occidental's expulsion Tuesday.

Meriage said the company was reviewing a document from the Ecuadorean government and weighing its legal operations, but did not expect any quick resolution.

Meanwhile, Ecuadorean officials have denied that the country was nationalizing its oil assets, believed to be the third-largest in South America.

Bolivia, apparently following the lead of Venezuela, nationalized its petroleum reserves two weeks ago.

Source: Xinhua