From Upside Down World, May 24:

The nullification of Occidental Petroleum’s oil-drilling contract by the Ecuadorian government has generated mixed reactions in the Americas. Ecuador's oil minister revoked the California-based oil giant’s contract last week for allegedly not informing the government that the company sold off 40% of its Ecuadorian holdings to Canadian-based EnCana. However, it had long been known that Oxy’s presence in Block 15—a 464,000 acre chunk of Northeast Ecuador--invoked militarization, an environmental catastrophe and sparked off a social unrest in indigenous communities that the government could not contain.

Upside Down World reported last week that the US State Department—led by Condi Rice—was the first to defend Oxy by chopping off negotiations for a Free Trade Agreement with the US. Apparently, it wasn't the first time the US Government has gone to bat for Oxy. FT negotiations were targeted by protesters and had been stalled since March anyway. Notice of Condi's move hardly left the business pages of the US press, but was big news in Latin America.

Ecuador's largest coalition of Indigenous groups, the CONAIE released a statement calling on their support base to remain alert and that, "just because one company has been thrown out of the country, we can't forget that Our Amazon is plagued with Multi-nationals that exploit and suck out our natural resources."

It took a few days, but OAS leader Miguel Insulza condemned the US cancellation, and stated that Ecuador was "within its rights," to nullify the contract. Referring to the US response he said, "These kinds of things cause resentment." [Financial Times, May 22] Insulza completes his first year as head of the OAS this week. (Readers will remember that Insulza beat out US-backed candidates Ernesto Derbez of Mexico, and ex-Salvadoran President Francisco Flores after the latter two were outed in various corruption schemes.)

See our last report and our last blog post on Ecuador.