[Marxism] Chavez visit, agreement to refine oil, gives Ecuador boost in clash with US

["Fred Feldman" <ffeldman@xxxxxxxxxxxxxxxx>]

Chavez oil boost for Ecuador
by
Wednesday 31 May 2006 3:37 AM GMT


        
        


Hugo Chavez, the Venezuelan president, has signed crude oil and natural
gas deals with Ecuador.


The two countries agreed on Tuesday to create joint companies to improve
Ecuadorean refineries and for the transportation and storage of natural
gas. The joint ventures will also facilitate oil exploration and
production.

Chavez was visiting Quito, the Ecuadorean capital, weeks after the
country terminated a contract with Occidental Petroleum, a US-based
company with which Ecuador is in dispute.

Chavez made a commitment to refine up to 100,000 barrels of Ecuadorean
oil a day.

He congratulated his counterpart, Alfredo Palacio, for recovering
Ecuador's natural resources. He was referring to Ecuador's decision to
terminate Occidental's contract over accusations that it illegally sold
part of an oil block without government authorisation.

Petroecuador, the state oil company, took over operations at the
oilfields, but some industry observers doubt that it can keep up
production for long.

Ecuador says it wants to agree a joint venture with another Latin
American oil company to operate the oilfields. Venezuela's PDVSA is one
of the candidates.

Occidental says it did nothing wrong and has filed an arbitration claim
in Washington seeking $1 billion in damages.

Ecuador has little refining capacity and this year expects to spend $1.7
billion on petroleum-based products imports, or 20% of the national
budget.

It stands to save $300 million a year on fuel imports through the deal
with Venezuela to refine its crude at a lower cost. The deal will start
in about 45 days, officials said.

In a similar trip to Bolivia last week, Chavez promised to invest $1.5
billion in the impoverished country's natural gas industry. Evo Morales,
the Bolivian president, nationalised the energy sector this month.

Reuters
By

You can find this article at:
http://english.aljazeera.net/NR/exeres/0088673F-D07C-46EB-9A7E-864A3D354
744.htm



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