Energy hungry Brazil will offer oil rich Ecuador a strategic alliance for the development of hydrocarbons when president Luiz Inaico Lula da Silva arrives in Quito for a two days official visit
Government owned Petrobras and Petroecuador officials are scheduled to hold parallel meetings on oil exploration and drilling in the Ecuadorian Amazon where Brazil has expressed an interest in two oil fields.
Ecuador which is highly dependent on oil revenue for its budget (40%) is currently trying to strengthen Petroecuador which has been systematically loosing to foreign companies and now represents less than half of the country's hydrocarbons production. Another area lagging is refining which forces Ecuador to import annually 60 million barrels of refined products.
With a controversial bill to give foreign oil companies greater autonomy blocked in Congress, Petrobras could become an acceptable alternative and help save President Lucio Gutierrez administration.
But Brazilian president Lula's ambitions go beyond petroleum, and he hopes to use this week's visit to secure contracts for Brazilian companies to work on the construction of new airports in Quito and the central Ecuadorian city of Tena.
Mr. Lula is also the leading figure in promoting Latin American integration, focusing on achieving a South American Community of Nations, and this will figure as a priority in the bilateral talks with President Gutierrez.