Posted on 08/22/2005 10:16:55 PM PDT by hedgetrimmer
QUITO (AFP) - Ecuador's state-owned oil firm is producing at half capacity, and may have difficulty resuming normal output due to damage caused by protestors, Energy Minister Ivan Rodriguez said.
Production resumed Sunday after President Alfredo Palacio deployed troops to Ecuador's Amazon basin, but oil infrastructure was badly damaged, officials said.
"What happened is worse than a war," said Rodriguez, estimating economic losses of 400 million dollars to the impoverished Latin American nation by year end.
Some of the wells were so badly damaged, "it is possible they cannot be recovered," he said, adding that Petroecuador was operating at 50 percent of its estimated 201,0000 barrels per day.
Protesters and government officials negotiated in Quito Monday in a bid to put an end to the week-long strike that forced Ecuador to suspend oil exports Thursday.
Protest leaders flown to Quito aboard military planes for the talks indicated they were holding firm on their demand for a greater share of oil revenues, however.
They have also said they want US oil firm Oxy out of the region.
"We are keeping with ending the contract with Oxy, and to renegotiating oil contracts with the other multinationals," said Guillermo Munoz, governor of Sucumbios province.
A state of emergency will remain in force in the region until the conflict is resolved, Defense Minister Oswaldo Jarrin said.
"When the conflict has been resolved, definitively and politically, then we will allow soldiers to return to their barracks," said Jarrin, whose predecessor resigned Friday as the crisis raged.
Ecuador's government deployed troops to its Amazon basin region and claimed an end to six days of civil unrest that had cut oil exports, but protesters declared only a truce in their fight for a larger slice of oil revenues.
"We granted a suspension to talk with administration officials, but lifting the strike depends on the agreements we reach," Orellana provincial governor and protest leader Guadalupe Llori told AFP earlier in a telephone interview.
Interior minister Mauricio Gandara said late Saturday residents of the region "had decided to end the strike."
"Reason has prevailed and people will be returning to work because the damage from the strike has been enormous," the minister said.
Palacio's government declared states of emergency in Sucumbios and Orellana provinces in Ecuador's east on Wednesday.
The protests forced Ecuador to suspend oil exports, a key source of foreign exchange, on Thursday, costing the country some 30 million dollars a day.
World oil prices shot higher after the suspension added to fears over tight global supply. Ecuador is South America's fifth-largest oil producer and more than half of its exports go to the United States. It also supplies Asian nations.
Private companies produce 340,000 barrels a day, but their output was cut to about 150,000 barrels because of the dispute, said Rene Ortiz, a spokesman for the private oil firms.
Petroecuador's production halted completely Thursday after protesters from the region took over a dozen oil wells and two regional airports and blocked roads.
The protesters, who include government officials and lawmakers, want foreign oil companies to build 200 kilometers (125 miles) of roads in their region and to give more jobs to locals.
They also want the government to renegotiate all contracts with foreign oil companies to demand a 50 percent share of the profits they make in Ecuador.
Clashes between demonstrators and security forces left at least 60 injured, said Munoz. He was arrested late Friday, along with the mayor of Lago Agrio, a major city in the area, for allegedly leading the protests.
Its easy, Ivan, impose income taxes to offset the damage. It puts public pressure on the leftist protesters to leave the infrastructure alone.
Oil up on Ecuador export halt, tight gas
LONDON (Reuters) - Oil regained some upward momentum on Friday, nudging back to $64 as lingering worries over tight U.S. gasoline supplies and a halt in Ecuador's oil exports helped the market bounce back from a mid-week rout.
Ecuador worsened the lost supply by announcing it had halted exports of about 144,000 barrels per day, most of which go to the United States, due to protests in Amazon provinces over the level of investment from foreign operators.
With many oil companies opting to return windfall profits to shareholders or sit on growing cash piles, instead of investing in new refineries or exploration efforts, some analysts see little relief from current prices in the years to come.
A river of money flowing into that country and it all goes into the pockets of a few hundred, if not less, people.
Revolution!
I wonder if there's Venezuelan money and Cuban intel behind the indigenous, anti-energy unrest in both Ecuador and Bolivia? Keeps Chavez' revenues coming in and hurts the US economically. Worse, wonder if there's Al Qaeda money behind it?
I would expect that Chavez is behind a lot of this and is funding it..... serves his interests and ideology....
My first husband was a Peace Corps volunteer in Ecuador in 1965. Just goes to show what good 40 yearws of that program has done.
Idiot!
I would suspect that China has a significant hand in it too. They have made much of their trips to South America and Cuba, their bilateral trade agreements with south America and the assistance they are providing Cuba and Venezuela.
Remember they are good at fomenting revolution, especially when it helps them to meet their goal of hegemon in Asia, and the destruction of the United States.
Maybe. But their economy is experiencing some severe energy shortages right now. I would guess they're more interested in steady flows of Ecuadoran and Bolivian oil and gas to calm international markets and keep their supply steady.
You never know though. Sometimes they let ideology dictate foreign policy, and then again sometimes they let national interest dictate. Makes the Chicoms unpredictable.
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