Ecuador says to offer oil firms new contracts

QUITO, Oct 6 (Reuters) - Ecuador plans to propose to oil companies a new type of contract in which the state would keep all the crude produced and pay firms a service fee to extract it, President Rafael Correa said on Saturday.

"On Monday we will have a new type of contract for them as service providers," Correa said during his weekend radio show "We are not going to be cheated again."

Foreign companies including Spain's Repsol (REP.MC) and Brazil's Petrobras (PETR4.SA) currently have contracts that allow them to keep part of the oil they extract.

In a surprise decree earlier this week, Correa hiked to 99 percent from 50 percent the state's share in extra oil revenues produced by foreign firms above a set benchmark price agreed in their original contracts.

Ecuadorean officials said the decree is meant as a bargaining tool to renegotiate oil contracts and raise the state participation in oil revenues.

The leftist former economist's move to grab the companies' windfall revenues echoes that of ally Venezuelan President Hugo Chavez, who has boosted the state control of the country's key petroleum industry.

Correa accuses foreign oil companies of cheating the state with unfair contracts that benefit them disproportionally amid booming oil prices.

Other oil companies in the aim of the contract overhaul are China's Andes Petroleum, France's Perenco and U.S.-owned City Oriente.

Correa said that if oil companies reject the extra oil revenues hike he could issue another decree to take way their remaining 1 percent share.