Another domino?

"Ecuador's Minister of Energy formally declared that Occidental's (NYSE:OXY) contract for the operation of Block 15 had been terminated and the Government of Ecuador has the right under Ecuadorian law to seize the assets immediately. Occidental is currently reviewing the contents of a 33-page document which it received from the Government of Ecuador. Occidental maintains that it has complied fully with all material obligations under its contract with the Government of Ecuador and is evaluating its legal options to defend its interests." Ecuador's Energy Minister Terminates Occidental's Block 15 Contract

Ecuador Govt Urged to Act at Once

Quito, May 16 (Prensa Latina) Amid the joy in Ecuador over the annulment of contracts with US oil company Oxy, local leaders are urging the government to act immediately and reject any possible US threats.

Economy Minister Rafael Correa stressed that a legal battle has been won, but the total revision of contracts with foreign companies investing in the country is still in process.

"We must be attentive to oil negotiations, as authorities must act with firmness and patriotism," the official said.

After the annulment of the State contract with Oxy yesterday, lawyer and oil expert Augusto Tandazo called on Petroecuador to take control of the "company´s goods, facilities, equipment, machinery, and rights, as agreed in the contract itself."

From now on, the government is in charge of drawing up the policy to be followed with the company. "Anything else that might be said would only be directed to cause confusion, pressure, and insecurity; as there is no place for arbitration," he emphasized, according to local news.

Local media has said the US Embassy will make a statement on this decision today, which experts agree would be a new interference in internal Ecuadorian affairs.

"The Bush administration announced Tuesday it has broken off negotiations on a free trade agreement with Ecuador after that government's decision to annul an operating contract with Occidental Petroleum Corp.

"We are very disappointed at the decision of Ecuador, which appears to constitute a seizure of assets of a U.S. company," Neena Moorjani, a spokeswoman for the U.S. Trade Representative's office, said in a statement. "At this time no further discussions are scheduled"." White House axes free trade talks with Ecuador

Ecuador Not Planning Oil Nationalization

Ecuadorean officials said Tuesday that the cancellation of U.S.-based Occidental Petroleum Corp.‘s contract and the seizure of its assets did not mean the Andean nation is nationalizing its oil industry.

Larry Meriage, vice president of communications and public affairs for Occidental, said Tuesday the Ecuadorean government has not taken over the company‘s operations yet. Employees are still running the facilities.

"The government has appealed to us for cooperation and for an orderly transition, which is an interesting development in itself," Meriage said. "They‘re telling you they‘re throwing you out, but they want you to help them. We‘re going to try to be cooperative, up to a point."

Gonzalez denied the government is planning to nationalize the Ecuadorean oil industry.

"From today, Petroecuador is taking effective possession of the fields," Gonzalez said.

But Ecuadorean Interior Minister Felipe Vega dismissed suggestions that Ecuador was lining up with Bolivia and Venezuela. He told Universal Radio Tuesday that the "only factor in common" with those countries is "the conduct of the oil companies — conduct which is absolutely unfair."

The dispute between Occidental and Ecuador has been brewing since August 2004, when Solicitor General Jose Maria Borja started trying to annul the company‘s exploration and pumping concession in Block 15, some 150 miles east of the capital of Quito.

Borja contended the company violated a pact signed in May 1999 by transferring 40 percent of its concession to Canadian company EnCana Corp. in 2000 without authorization from the Energy Ministry.

Meriage said Occidental tried to negotiate a resolution with Ecuadorean officials for two years, but they rejected a number of offers by the company.

Venezuela could drill former fields of Oxy in Ecuador

"There is the possibility of forming a strategic alliance with a state company, as set forth in the regulations," Ecuadorian Minister of Energy Iván Rodríguez said.

Additionally, there is the possibility of "contracting directly a state company of a foreign country to reinforce technically Petroproducción. The subsidiary of state oil company Petroecuador will be responsible for the fields that were held by company Oxy."

Rodríguez listed as candidates for a partnership state oil holding Petróleos de Venezuela (Pdvsa), ENAP of Chile, Mexican Pemex, Colombian Ecopetrol and Petrobras of Brazil.

He noted that Ecuador has also held discussions with Chile and Mexico concerning bidding of additional oil deposits in Amazon, AFP quoted.

Ecuador travel guide

The smallest of the Andean republics, Ecuador is nonetheless one of the most interesting countries in the Americas.

For over 500 years, this land has been capturing the imagination of men eager to demystify El Dorado, that "mythical land strewn with plains of cinnamon trees, where it is pleasant to live and gold abounds". The list of those bold enough to try their luck is a long one: conquistadors, scientists, monks, travellers and tourists. Today, El Dorado is still a myth, and the gold of the Incas now glitters inside the country's many religious sanctuaries, silent but stirring testimonies to a rich past that was extraordinary in many ways, albeit marked by much bloodshed.

Wedged between Peru and Colombia, this small South American nation lies on the Pacific coast and is bisected by the Andes. It takes its name from the equator, the great circle perpendicular to the earth's axis of rotation and equidistant from its poles, which divides the surface into northern and southern hemispheres. It runs through the northern part of the country, right near Quito.

An amazingly varied country, Ecuador boasts magnificent scenery, with lofty volcanoes proudly studding the two cordilleras that form the country's backbone. It also features : superb religious monuments that bear witness to the era of Spanish colonization; a huge, luxuriant forest that covers the mysterious Amazon region that seems to stretch endlessly into the distance; scores of picturesque little native villages, which, perched in the Andes, seem frozen in the past; and finally, of course, the extraordinary world of the Galápagos Islands.

Geography

Aside from the magnificent Galápagos Islands, Ecuador is divided into three distinct geographical regions: the Costa (coast), the Sierra and the Oriente. It covers a total area of 270,670km2 (104,513 sq mi). In 1941, however, a war suddenly broke out between Ecuador and Peru.

The end result was that Ecuador had to surrender part of its territory to the Republic of Peru under the Protocol of Rio de Janeiro (1942). Don't be surprised, therefore, if a map put out in Ecuador doesn't show the same borders as one made elsewhere.

To the west, the low coastal plain commonly known as the Costa runs between the Andes and the Pacific Ocean for the entire length of the country, covering an area of over 70,000km2 (27,029 sq mi) of scenery and vegetation that change according to the variations in the climate. This coastal plain ranges in width from 30 to 200km (18 to 124mi).

The Sierra is made up of two parallel mountain chains (the Western and Eastern Cordilleras) which run through the country from north to south. Home to about 60% of the country's population, it's studded with over 30 awe-inspiring volcanoes, some of which are still active. The highest is Chimborazo at 6,300m (20,669ft), though it is no longer active; the highest active volcano is Cotopaxi at 5,978m (19,612ft). These cones are surrounded by many other smaller peaks and form a volcanic massif known as the Avenida de los Volcanes.

The Oriente, located east of the Eastern Cordillera, is part of the Amazon Basin. Although this region accounts for over half of the Ecuadoran territory, less than 10% of the total population lives here. These inhabitants are clustered in small, rustic, semi-autonomous villages linked by a vast river network that is easy for small boats to travel along. However, the discovery of oil in Lago Agrío in 1967 led to the construction of a road across the Sierra to Quito as well as an oil pipeline.

Made famous by English naturalist Charles Darwin's research, the Galápagos archipelago lies in the Pacific Ocean some 1,000km (621mi) west of the Ecuadoran coast. It consists of 15 islands and 40 islets of volcanic origin. These are home to many fascinating plant and animal species, some found nowhere else in the world.

If an argumentative group of travelers sat down to design a shared destination, they would be hard put to come up with a place that would best Ecuador. Packed like a knee-cap between Peru and Colombia, Ecuador contains within its borders an improbable variety of landscape and culture. For the mountaineer, it is bisected by an epic stretch of the northern Andes. For the jungle explorer, there is a biological mother lode within the Amazonian Oriente. The sea-minded are rewarded with miles of Pacific coastline, to say nothing of the living wonders of the Galapagos Islands. Not only are these regions highly defined, but excluding Galapagos they are also wonderfully contiguous. The entire country is about the size of Washington state, and it is home to some of the world's most extraordinary national parks. In a matter of two hundred miles, the traveler can penetrate all of the mainland's defining regions--the coastal lowlands in the West, the volcanic central highlands, and the rainforests of the East, or Oriente.