Crisis hits Ecuador oil regions

Thursday, 09, Mar 2006 07:55

The key oil producing regions of Ecuador have been hit by strike action, with the government declaring a state of emergency in an attempt to restore production.

Oil production in the eastern Ecuadorian provinces of Napo, Orellana and Sucumbios was nearly halved as workers protesting pay and working conditions were fired on with tear gas by government troops.

For the second time in the past three weeks the government in Quito has been forced to declare a state of emergency in the regions in order to restore production at the state oil concern Petroecuador.

Ecuador's oil production is currently at 96,360 barrels of oil per day, with the strike action knocking output from its normal 200,000 barrels. Workers for the state oil firm seized control of an installation demanding payment of back pay and improved working conditions.

Despite the protest and following the government action, Petroecuador expects production levels to be restored to around the 190,000 barrel mark within the next four days.

While troops are moved into strategic positions to maintain order in the strike-hit regions, the government has withheld payments to the firm while simultaneously demanding that Petroecuador improves its accounting practices.

Ecuador's economy minister Diego Borja indicated today that the government plans to release $20 million at the end of the week to pay striking oil staff salaries.