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Ecuador's oil commitments to be covered by Venezuelan 'loans'


Ecuador's oil commitments to be covered by Venezuelan 'loans'


Venezuela is to lend Ecuador crude oil, without charge, so that it can cover its export obligations. Ecuador’s output has been halted by protesters who smashed oil field equipment as they demanded more investment and employment in the industry. The announcement from Venezuelan President Hugo Chavez, came while was on a visit to Cuba. Chavez said: “Because of its internal problems, Ecuador has had to suspend production of its oil. They have asked us to lend them oil and Venezuela will cover the Ecuadorian government’s commitments.”

Disturbances and attacks on pipelines in oil fields in the Amazon provinces of Sucumbios and Orellana, led Ecuador to declare a state of emergency. Pipelines and pumping machinery was blown up or vandalised. The protest leaders agreed to stop the attacks and negotiate with the government after they were released from jail. The events caused crude oil prices in the US to rise by more than two dollars a barrel on Friday. Ecuador’s state-owned oil company is currently only producing about a quarter of its normal output and private firms are pumping virtually nothing. The government says full production will not be restored until November. Venezuela did not reveal how much oil it will lend Ecuador or how long the arrangement will last.
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