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Tuesday, 26 February, 2002, 22:04 GMT
Protest threat to Ecuador oil
Protestor burning a tyre
Protestors have blocked roads and highways
Ecuador's state-owned oil company, Petroecuador, has reported losses of almost $1m after protests by Indian communities brought the country's oil production to a virtual standstill.

President Gustavo Noboa
Noboa has declared a 'state-of-emergency' in parts of the country
President Gustavo Noboa last week declared a state of emergency in some parts of the country because of the protests.

The inhabitants of Sucumbios and Orellana provinces in the north east of the country have taken to the streets in their thousands to protest at the lack of investment in their communities.

They want more money from oil revenues spent directly on them.

The government faces a difficult choice - it relies on oil as a mainstay of the economy to pay off external debt.

But a prolonged three year recession has led to growing poverty, especially among native Indian communities.

Locals want investment

Teargas has been used in an attempt to disperse protestors who have blocked as many as sixty oil wells and five major oil refineries.

The protesters have also targeted a new billion dollar oil pipeline project currently under construction with roadblocks to prevent anyone or anything being transported on one of the country's major road links.

Local residents are demanding that the consortium building the pipeline, OCP Ecuador, pay $10m for development projects, ranging from construction of roads and hospitals to providing running water.

Most native Indian communities in the north east of the country have not yet seen any benefits from the oil boom of the last thirty years.

Similar protests have brought down previous governments.

Four years ago the flamboyant former President, Abdala Bucaram - who once enjoyed huge public support - was swept out of office.

He had failed to deliver on his election-winning slogan "Put the poor people first".

Pipe dreams

Oil is Ecuador's most important mineral resource and the country's largest source of export revenues, accounting for over a third of foreign income.

Ecuador currently produces about 400,000 barrels of crude per day.

The 503 km pipeline being built by OCP is due to be completed next year and is expected to more than double crude transport capacity to 850,000 barrels per day.

OCP is made up of Canada's Alberta Energy, Italy's Agip Petroleum, Kerr-McGee, Occidental Petroleum, Spain's Repsol, Argentina's Perez Companc and construction firm Techint.

The BBC's Richard Collings
"Protests on this scale have brought down former governments."
See also:

20 Feb 01 | Business
Ecuador adapts to the US dollar
30 Apr 01 | Business
Banana war is over
15 Jun 01 | Business
Ecuador counts cost of mudslides
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