Ecuador returns to OPEC

President of Ecuador, Rafael Correa, announced during a radio programme on Saturday October 13, 2007 that his country would be returning to the Organization of Petroleum Exporting Countries (OPEC) as of November this year. <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Ecuador, which is the fifth largest producer of oil in South America with 530,000 barrels of oil per day, had left OPEC 15 years ago. Then, Ecuador claimed it was forced to leave OPEC  in 1992 because of the heavy annual membership fee of 2 million U.S. dollars and the organization's refusal to allow Quito to increase its production quota. Quito owns OPEC a US$5.2 million debt.  

Foreign Oil companies working in Ecuador -such as Petrobras (Brasil), Andes Petroleum (China), Repsol IPF (Spain), City Oriente (USA) and Perenco (France) - currently exploit 49 oil reserves. Last month, Quito changed its oil regulations. They now have to conform themselves with just one percent of the profits in the oil business. On the other hand, the Ecuadorian state now keeps 99% of the oil revenues. In an attempt to keep fiscal account in the blue, it might now easily fund subsidies on petrol, flour and urea. More social spending is also expected. Quito would be asking Caracas for technical assistance on oil management. Ecuador also announced new regulation on capital flight.

Sources: La Hora, Telesur, Hoy, El Comercio, StockHouse, Economic Times, Xinhua, CRE