Morpheus
27th August 2005, 23:00
VENEZUELA TO LEND OIL TO ECUADOR
Monday, Aug 22, 2005
By: Gregory Wilpert * Venezuelanalysis.com
Caracas, Venezuela, August 22, 2005 ‹Venezuela's President Chavez announced that Venezuela would
provide Ecuador with a cost-free loan of oil, so that the country would be able to meet its oil
supply obligations. Ecuador has been undergoing a crisis in its oil industry recently, due to a
partial oil industry strike and the sabotage of some of its oil pipelines.
Ecuador had asked Venezuela for the help and Chavez, during his weekly television program Aló
Presidente, broadcast from Cuba this week, announced that his government had agreed to fulfill the
request. "We decided yesterday. We are going to help Ecuador," said Chavez. "Venezuela will cover
the commitments that the Ecuadorean government has not been able to fulfill these days. They will
not have to pay a cent." Chavez also said he hoped Ecuador would re-join OPEC, which it had left
in 1992.
Ecuador has said it would re-pay Venezuela in oil, once its production has increased again.
According to the president of Ecuador's oil company, Petroecuador, the Venezuelan oil is needed to
supply some of Ecuador's refineries, which are currently operating far below capacity. Its oil
reserves have dropped to a seven-day supply, meaning that it would soon not be able to meet its
contractual commitments. Ecuador is the second largest South American oil supplier to the U.S.
after Venezuela.
The two provinces, Orellana and Sucumbios, where the protests are taking place, normally produce
200,000 barrels of oil per day. Over the weekend, though, production in these areas had dropped to
35,000 barrels per day. Protestors are demanding that transnational oil companies doing business
in Ecuador invest more money in local infrastructure and in jobs. According to the government, it
would take until November to restore the region's oil production to pre-protest levels.
Representatives of Venezuelan opposition parties, such as César Perez Vivas of the
Christian-Democratic party Copei, said they are opposed to the oil loan to Ecuador. According to
Perez Vivas, Chavez is, "committing the crime of treason," by providing this oil, without having
consulted with the parliament. Also, said Perez Vivas, such actions would lead the country to
bankruptcy.
José Luis Farias, a leader of the party Solidarity, whose members had split from the pro-Chavez
coalition in early 2002, argued that Chavez has, "reiterated his mania for distributing money
outside the country while the [Venezuelan] poor he takes care of with a bag of food and some
little mission with $75." Farias was referring to the very popular social programs known as
missions, which provide free health care, high school education, discounted food, and university
scholarships.
Today State Department spokesperson Sean McCormak said, when asked to characterize the
department's position on Venezuela's offer to lend oil to Ecuador, "what we would encourage any
country in the hemisphere to do is if they do come to the aid of a neighbor, do so in goodwill, do
so in a transparent manner, in a way that isn't intended to undercut or influence the political
affairs of another country."
Bush administration officials had repeatedly suggested that Venezuela is seeking to influence or
destabilize governments in the region, particularly those of Ecuador and Bolivia. This is an
accusation the Chavez government has repeatedly denied, pointing out that the Bush administration
has no proof for it allegations. Yesterday, Chavez said it is the Bush government that
destabilizes the world.
http://www.venezuelanalysis.com/news.php?newsno=1725
Monday, Aug 22, 2005
By: Gregory Wilpert * Venezuelanalysis.com
Caracas, Venezuela, August 22, 2005 ‹Venezuela's President Chavez announced that Venezuela would
provide Ecuador with a cost-free loan of oil, so that the country would be able to meet its oil
supply obligations. Ecuador has been undergoing a crisis in its oil industry recently, due to a
partial oil industry strike and the sabotage of some of its oil pipelines.
Ecuador had asked Venezuela for the help and Chavez, during his weekly television program Aló
Presidente, broadcast from Cuba this week, announced that his government had agreed to fulfill the
request. "We decided yesterday. We are going to help Ecuador," said Chavez. "Venezuela will cover
the commitments that the Ecuadorean government has not been able to fulfill these days. They will
not have to pay a cent." Chavez also said he hoped Ecuador would re-join OPEC, which it had left
in 1992.
Ecuador has said it would re-pay Venezuela in oil, once its production has increased again.
According to the president of Ecuador's oil company, Petroecuador, the Venezuelan oil is needed to
supply some of Ecuador's refineries, which are currently operating far below capacity. Its oil
reserves have dropped to a seven-day supply, meaning that it would soon not be able to meet its
contractual commitments. Ecuador is the second largest South American oil supplier to the U.S.
after Venezuela.
The two provinces, Orellana and Sucumbios, where the protests are taking place, normally produce
200,000 barrels of oil per day. Over the weekend, though, production in these areas had dropped to
35,000 barrels per day. Protestors are demanding that transnational oil companies doing business
in Ecuador invest more money in local infrastructure and in jobs. According to the government, it
would take until November to restore the region's oil production to pre-protest levels.
Representatives of Venezuelan opposition parties, such as César Perez Vivas of the
Christian-Democratic party Copei, said they are opposed to the oil loan to Ecuador. According to
Perez Vivas, Chavez is, "committing the crime of treason," by providing this oil, without having
consulted with the parliament. Also, said Perez Vivas, such actions would lead the country to
bankruptcy.
José Luis Farias, a leader of the party Solidarity, whose members had split from the pro-Chavez
coalition in early 2002, argued that Chavez has, "reiterated his mania for distributing money
outside the country while the [Venezuelan] poor he takes care of with a bag of food and some
little mission with $75." Farias was referring to the very popular social programs known as
missions, which provide free health care, high school education, discounted food, and university
scholarships.
Today State Department spokesperson Sean McCormak said, when asked to characterize the
department's position on Venezuela's offer to lend oil to Ecuador, "what we would encourage any
country in the hemisphere to do is if they do come to the aid of a neighbor, do so in goodwill, do
so in a transparent manner, in a way that isn't intended to undercut or influence the political
affairs of another country."
Bush administration officials had repeatedly suggested that Venezuela is seeking to influence or
destabilize governments in the region, particularly those of Ecuador and Bolivia. This is an
accusation the Chavez government has repeatedly denied, pointing out that the Bush administration
has no proof for it allegations. Yesterday, Chavez said it is the Bush government that
destabilizes the world.
http://www.venezuelanalysis.com/news.php?newsno=1725