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Monday, September 10, 2007

Ecuador to invest $721.7 mln in energy projects

QUITO, Sept 7 (Reuters) - Ecuador said on Friday it plans to spend $721.7 million in projects to boost oil production and electricity generation, the economy ministry said in a statement.

The projects include an upgrade to the 110,000-barrels-per-day-capacity Esmeraldas oil refinery, the country's largest, and to repair secondary oil lines and build a hydroelectric plant, the ministry said.

South America's No 5 oil producer has seem its state output dwindle in recent years due to the lack of investment in key oil projects.

There is no date set for the start of the projects or the release of the funds that will come from a special oil fund that administers the sale of crude extracted from an oil block seized from U.S.-based Occidental Petroleum last year, the statement said.

Ecuador is challenging a 2006 arbitration claim filed by Occidental for termination of its contract after the government accused the company of illegally transferring part of an oil block.

Occidental denies any wrongdoing and demands the return of its assets and $1 billion in damages.

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