MercoPress. South Atlantic News Agency

Ecuadorian candidate promises to honor oil contracts

The Conservative candidate in Ecuador's presidential runoff announced he would respect contracts with oil companies operating in the country.

Alvaro Noboa will be facing next November 26 left wing candidate Rafael Correa who has promised to review the oil contracts.

"Contracts signed will be honored and opportunities for new explorations will be awarded so the government has access to more funds to invest in social promotion and eventually purchase pending sovereign debt", said Noboa in an interview with El Universo.

Correa on the other hand favors reviewing contracts to recover the country's hydrocarbons resources and invest the funds in socially oriented projects.

Noboa who also supports a controversial free trade agreement signed with United States, but pending Congressional approval, said he would build oil refineries in Ecuador so as to ensure the country's supply of refined fuels as well as extend concessions to the private sector.

"We must liberate our economy; government companies must be open to managerial concessions, this means highways, telecommunications and electricity among others.

Because of mismanagement, public services are too expensive in Ecuador", said Noboa who is also the richest man with an empire built on the country's second most important industry banana plantations.

However he was quick to point out that his program does not include Petroecuador, the government owned oil company.

"This is an issue which must be much discussed by Ecuadorian public opinion. There's a serious unions' problem and a very serious corruption problem in our government managed oil industry", he underlined.

Oil is Ecuador's main export revenue and one of the main sources of financing for the budget.

Ecuador is Latinamerica's fifth oil producer with a daily production of 540.000 barrels, of which 43% is managed and extracted by Petroecuador.

Oil revenue for Ecuador in the first six months of this year totaled 5.37 billion US dollars compared to 5.4 billion for the whole of 2005.

The current Ecuadorian government unilaterally decided to apply a windfall tax on foreign oil companies and annulled a contract with a US oil company, which has strained relations with Washington.

US educated economist and maverick politician Correa is campaigning on reviewing oil contracts, the free trade agreement with the US and political reform which includes convening a constitutional assembly.