Introduction

During 2006, when the price of crude oil began its quick climb in the international markets, the Ecuadorian Government and the Ecuadorian Congress decided - in coordinated fashion - to process a bill whereby a "windfall" profit tax would be applied to income unexpectedly obtained by companies that had executed participation contracts for exploration and exploitation of hydrocarbons with the Ecuadorian State. According to this contractual system, companies explore for and exploit oil in exchange for which they deliver a share of their production to the State. The ...