February 27, 2002

Ecuador army in control in oil provinces

QUITO, Ecuador (Reuters) --Ecuador's president, Gustavo Noboa, has put the
army in control of two Amazon jungle provinces where protesters took over oil
wells and stopped construction of a pipeline this week.

Protesters in Sucumbios and Orellana provinces seeking development funds from a
company building the pipeline began stopping traffic on highways and took control
of oil wells and government offices this week, stopping construction on the pipeline
and hampering oil output.

The demonstrations in steamy jungle towns some 113 miles (180 km) east of Quito
have resulted in crude output losses of 118,000 barrels to date, worth about $1.9
million, according to state oil company Petroecuador.

The protests have also halted work on the new $1.1 billion pipeline, which is
expected to double this Andean country's crude transport capacity, flooding
government coffers with fresh oil revenues starting in 2003.

Noboa declared a state of emergency last Friday in the two provinces in an attempt
to halt protests and restore oil activity in the area.

But after the protests, which began in mid-February, intensified this week, Noboa
put the area under the control of a regional army commander and limited
constitutional rights to express opinions to the press and hold peaceful meetings.

"The commander of the army's Amazonas division, Gen. Jorge Mino Vaca, is
delegated as the sole authority to restore order in the area of security," said
Tuesday's presidential decree, which was made public on Wednesday.

Protesters, led by a handful of local politicians, seek more development funds for
poor Amazon towns from pipeline builder OCP Ecuador SA, but the company says it
already signed an accord with local authorities last year.

    Copyright 2002 Reuters.