MercoPress. South Atlantic News Agency

Ecuador denies any “flirting” with Chavez

Ecuador's government said that the coming visit this Tuesday of Venezuela's Hugo Chavez will focus strictly on energy cooperation matters and that Quito is not flirting with any anti-United States block or axis.

President Alfredo Palacio and Mr. Chavez are scheduled to sign several agreements including one to refine Ecuadorian crude in Venezuela and then ship the fuel back.

Chavez' visit comes at a very delicate moment since Ecuador and the US are at logger heads over the recent cancellation of US Occidental Petroleum concession to drill for oil in the Ecuadorian Amazon. U.S. officials were already unhappy with Ecuador's decision to impose a windfall-profits levy on foreign oil companies operating in the country.

The US reaction to the two incidents was to suspend negotiations for a free trade agreement with Ecuador, disappointing the local business community which fears that similar agreements signed with neighbouring Colombia and Peru will give these two countries an upper edge.

Some analysts suggest that Chavez will try to exploit Quito's differences with Washington and attempt to recruit Ecuador into the "Bolivarian" regional integration project conceived as an alternative to U.S.-proposed Free Trade Association of the Americas. But senior Ecuadorian officials discarded such speculations.

Foreign Minister Francisco Carrion said that Ecuador has no interest in joining the increasingly close alliance of Venezuela and Bolivia's President Morales to create a Caracas-La Paz-Quito "axis".

Energy Minister Ivan Rodriguez stressed that Ecuador will save as much as 300 million US dollars a year on fuel by having its crude refined in Venezuela.

In yet another effort to dispel concerns surrounding the event, presidential press secretary Enrique Proaño said that Chavez's visit is not connected to the "chill" in relations with Washington.

Furthermore Proaño revealed that when President Palacio and Economy Minister Diego Borja two weeks ago visited Caracas to work out the refining agreement, President Chavez asked for a reciprocal visit to Quito to close the deal.

"We need this energy cooperation agreement, but we won't be going beyond; this in no way means an alignment with Chavez' block or taking distance from United States". Energy minister Rodriguez added that any closeness can be attributed to the fact "Venezuela has refining capacity". Besides Ecuador has strong energy links with Saudi Arabia, Morocco, India and China.

Ecuador's total daily oil output is roughly 530,000 barrels, which earned 5.4 billion US dollars last year from exports plus helping to finance 40% of the country's budget.