Ecuador would revoke its contract with the U.S.-based company Occidental Petroleum and seize its assets, Ecuador's Energy Minister Ivan Rodriguez said on Monday.

The announcement came hours after Fernando Gonzalez, the head of state-run Petroecuador, ruled out a negotiated settlement, saying a deal proposed by Occidental would undermine the interests of the state oil company.

Rodriguez told a news conference that "We accept the demand and petition of Petroecuador and the country's attorney-general" and declared the annulment of the contract."

The U.S. firm is now required to immediately hand back its oil fields and hand over all equipment, machinery and other elements of exploration or of production to Petroecuador.

Occidental produces about 100,000 barrels of crude per day in Ecuador, about 20 percent of the country's total output, and is a main investor in the country's oil industry.

Experts said Occidental could still appeal the decision in Ecuadorian and international courts.

Source: Xinhua