The Ecuadorian government expects to sign new service contracts next year with private oil companies operating in the country to replace several current transitory participation deals, Mines and Oil Minister Germanico Pinto said Tuesday.

"We hope to have signed all the contracts at the end of 2010," Pinto said at a press conference.

Ecuador wants to switch all current agreements with private companies to service contracts and to take more control over its natural resources.

Pinto said that by the middle of September there will be the draft of the new contracts ready, which will be given to the private sector companies after which negotiations will begin with each company.

The ministry will name negotiating teams in different areas for each contract.

"What we will negotiate will be specific parameters for each oil block. I have optimism that we will reach agreements," Pinto said.

According to preliminary plans, in October the ministry will start negotiations with Andes Petroleum Co., a joint venture between two giant Chinese state-run oil companies, China National Petroleum Corp. and China Petroleum & Chemical Corp. (SNP), known as Sinopec.

The negotiations will continue with Brazilian state-run oil company Petroleo Brasileiro SA (PBR) and Spanish oil company Repsol YPF SA (REP), among others.

Agip Oil, a local unit of Eni SpA (E), the only company that now has a service contract, must sign a transitory contract which will be changed in one year for another service contract using the new model.

The company has offered to invest $125 million to 2023 if it succeeds in signing a new services contract.

Agip produces around 23,000 barrels of oil a day in Block 10 in the Amazonas region.

Late Monday, the government decided to extend by up to one year the temporary contracts it has with Chinese-owned oil company PetroOriental, a unit of Andes Petroleum Co., for oil blocks 14 and 17.

Andes Petroleum produces around 15,000 barrels per day in both blocks. Its total production in Ecuador is around 60,000 barrels per day, including the Tarapoa oil field, operated by the company using a participation deal, which will be changed into a services contract.

With the new contracts, foreign companies won't be able to seek international arbitration at the World Bank's International Center for Settlement of Investment Disputes. Instead, they will have to use local or regional courts in Ecuador to settle any disputes.

-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@dowjones.com