Quito, Ecuador – Some 5.000 people took to the streets here Tuesday to demand that Ecuador expel U.S.-based Occidental Petroleum, accused of violating the terms of its concession to extract oil from the country’s Amazon region.
Petroecuador – the state-run oil company – and public prosecutors have asked that Oxy’s contract be cancelled because the U.S. firm violated it by transferring – without telling the government – 40 percent of its shares to the Canadian company EnCana, which last month sold the interest to a Chinese oil consortium.
Oxy has proposed a settlement that would allow it to continue operating in the Andean nation, and that submission is now being reviewed by Petroecuador.
The demonstrators, many of them Indians from the Amazon, gathered in downtown El Arbolito Park, from where they set out on a march carrying the protest to outside the attorney general’s office, the Energy and Mines Ministry and Congress.
The protesters, who also carried signs and shouted slogans denouncing negotiations on a free-trade accord with the United States, were scattered by tear gas after breaking through the cordon of police guarding the presidential palace.
During the protest the demonstrators chanted repeatedly, “Oxy get out,” and raised posters with slogans against both the U.S. company and Attorney General Jose Maria Borja, who last week said that there might be a chance of doing business with the American firm.
Borja said Tuesday that it is the head of state, Alfredo Palacio, who ought to decide on whether a contract can be negotiated with Oxy, but Interior Minister Felipe Vega said that the government “is just another spectator” in the case.
“The president respects the independence of those who should take the decisions within a legal framework,” said Vega, adding that the deciding authority in this case would be Energy Minister Ivan Rodriguez.
Occidental produces about 111,000 barrels per day from its fields in the Amazonian region known as Block 15, where the California firm has invested more than $6 billion in plant and equipment.
If the Ecuadorian government were to void the contract with Occidental, Petroecuador would take over Oxy’s operations and facilities in Block 15.
Ecuador’s total daily oil output is roughly 530,000 barrels.
Ecuador’s oil exports, which last year totaled $5.4 billion, are by far the country’s biggest source of hard currency and oil revenues finance almost 40 percent of the central government’s budget.
