Reuters Tuesday, May 16, 2006
QUITO, Ecuador The Ecuadorean government on Tuesday began to take over the operations of the U.S. oil giant Occidental Petroleum, the latest move in Latin America against foreign energy producers after nationalization in Bolivia and growing state intervention in Venezuela.
Ecuador revoked Occidental's contract on Monday after accusing it of transferring part of an oil field without authorization. Occidental says it has complied with its obligations and still hopes to settle the dispute. Company executives held talks with Ecuadorean energy officials, who were escorted by police into the company's Quito offices.
President Alfredo Palacio has been under pressure from indigenous Indian groups in the oil-rich Amazon to expel Occidental. The groups accuse the company of exploiting natural resources with no benefit for Ecuadoreans. Occidental had also become a lightning rod for criticism of U.S. "imperialism."
However, Ecuadorean officials ruled out any nationalization of the oil industry. Officials say the country will receive an extra $100 million per year in oil revenues as a result of the Occidental contract cancellation.
The surprise contract cancellation came a little more than two weeks after Evo Morales, the leftist president of Bolivia and the country's first indigenous leader, nationalized the industry and ordered the military to occupy natural gas fields.
Bolivia's move sparked Wall Street fears that the president of Venezuela, Hugo Chávez, a self-styled revolutionary famous for his anti-U.S. rhetoric, was pushing his neighbors in a campaign to tighten state control over natural resources.
The United States said that as a result of the seizure of Occidental's assets, no further talks with Ecuador were scheduled on a free-trade agreement.
"We are disappointed by this decision," said Kurtis Cooper, a spokesman for the U.S. State Department, and he added that the government was seeking "clarification with the government of Ecuador."
Analysts warned against pointing the finger at Chávez as the culprit in $
QUITO, Ecuador The Ecuadorean government on Tuesday began to take over the operations of the U.S. oil giant Occidental Petroleum, the latest move in Latin America against foreign energy producers after nationalization in Bolivia and growing state intervention in Venezuela.
Ecuador revoked Occidental's contract on Monday after accusing it of transferring part of an oil field without authorization. Occidental says it has complied with its obligations and still hopes to settle the dispute. Company executives held talks with Ecuadorean energy officials, who were escorted by police into the company's Quito offices.
President Alfredo Palacio has been under pressure from indigenous Indian groups in the oil-rich Amazon to expel Occidental. The groups accuse the company of exploiting natural resources with no benefit for Ecuadoreans. Occidental had also become a lightning rod for criticism of U.S. "imperialism."
However, Ecuadorean officials ruled out any nationalization of the oil industry. Officials say the country will receive an extra $100 million per year in oil revenues as a result of the Occidental contract cancellation.
The surprise contract cancellation came a little more than two weeks after Evo Morales, the leftist president of Bolivia and the country's first indigenous leader, nationalized the industry and ordered the military to occupy natural gas fields.
Bolivia's move sparked Wall Street fears that the president of Venezuela, Hugo Chávez, a self-styled revolutionary famous for his anti-U.S. rhetoric, was pushing his neighbors in a campaign to tighten state control over natural resources.
The United States said that as a result of the seizure of Occidental's assets, no further talks with Ecuador were scheduled on a free-trade agreement.
"We are disappointed by this decision," said Kurtis Cooper, a spokesman for the U.S. State Department, and he added that the government was seeking "clarification with the government of Ecuador."
Analysts warned against pointing the finger at Chávez as the culprit.
http://www.iht.com/articles/2006/05/16/business/ecuador.php
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