Ecuador revokes Occidental oil contract

[Eugene]

Ecuador revokes Occidental oil contract
Mon May 15, 2006 8:04pm ET

By Carlos Andrade

QUITO, Ecuador (Reuters) - Ecuador's Energy Minister said on Monday the government
would revoke a contract held by Occidental Petroleum (OXY.N: Quote, Profile, Research)
and strip the U.S. company of its assets in South America's fifth biggest oil producer.

"We accept the demand and petition of Petroecuador (the state oil company) and
the country's attorney general and declare the annulment of the contract," Minister
Ivan Rodriguez told reporters.

The long-running legal row with Occidental has sparked repeated protests by indigenous
groups and poor Amazon regions demanding the government expel the company and introduce
reforms giving the poor more benefits from oil revenues.

Hours before the announcement Petroecuador turned down an opportunity to negotiate a way
out of the dispute with Occidental. An Occidental spokesman was not immediately available
for comment.

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Full article: http://today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-05-16T000357Z_01_N15327208_RTRUKOC_0_US-ENERGY-ECUADOR.xml

Related thread: Ecuador seeking fair compensation from Occidental

[cliss]

1. It's happening.....

it's really happening. The whole of Central & South America is turning away from US policies.

It appears that we're outnumbered, too. I just checked Wikipedia. The total combined population of South America is over 342,914,000 people.

Bush, you just can't fight 'em all.

[Boomer]

2. Talk about stretching the military

Let's see, we're in Afghanistan and Iraq, want to attack Iran soon, with Argentina in the wings, and now Ecuador needs to be added to the list of targets.

Yup, that a tall order for our troops. Gonna need LOTS of yellow ribbons for those SUVs.

[Oerdin]

3. Let's be realistic here.

The net result of all these nationalizations is that few companies will invest in these countries meaning there will be fewer jobs and less development. The proper way to do this to allow the companies to invest, make sure the legal frame work exists to protect private property, then tax them to insure the state gets its fair share. This is the system which works. Simply stealing property, and nationalizing poperty without fair market value to the owner is stealing, will not improve Latin America's level of development over the long term.

It didn't work when the nationalists wave sweeped through latin America in the 1930's or the 1950's so why would it work now? To keep doing the same policies and expect that suddenly you will get a different result is not logical. If we really wanted to improve the lives of people in Latin America then we'd be urging them to follow Asia's example of successful development and improved standards of living. Come to think of it that is the exact same system the west and Japan successfully developed under.