PetroEcuador President Pareja Is Fired After Protests

By Stephan Kueffner

Nov. 29 (Bloomberg) -- Ecuadorean President Rafael Correa removed the head of the state-owned oil company, saying the government needed to re-establish order at PetroEcuador after protests shut $3 million of daily production in the country.

PetroEcuador President Carlos Pareja was fired today and replaced by Fernando Zurita, a Navy admiral, the government said in a statement. Oil produces about a quarter of state revenue.

Correa declared a state of emergency for the company, saying it was so badly run he was left with no option other than bringing in the Navy. An emergency order may be applied to Orellana province, Ecuador's main oil-producing area, if the protests over jobs and environmental concerns don't end, he said.

``It is necessary to urgently intervene in the whole of the PetroEcuador system to safeguard national interests,'' Correa said today in the statement. Correa named Pareja to the post when he took power in January.

Protesters demanding jobs, better roads and environmental cleanup forced the company to shut 47 oil wells at the Auca and Cononaco fields this week, trimming 20 percent of production at PetroEcuador's biggest unit. Ecuador is South America's fifth- largest oil producer, with average daily output of 500,000 barrels.

``A lot of money is being lost daily'' because of the protests, said Zurita, speaking at the presidential palace in Quito. He said his first task will be to establish order in Orellana and arrest protesters, PetroEcuador employees or anyone else who hampered oil production.

Efficiency

Correa said there had been a ``progressive and intense'' loss of efficiency at PetroEcuador, and said violent protests won't be tolerated.

Zurita said he would use a team of Navy officials at ``key positions'' in the company. Pareja will be retained as an adviser to Correa, a 44-year old economist with a doctorate from the University of Illinois.

Ecuador is set to officially rejoin the Organization of Petroleum Exporting Countries on Dec. 5 after a 15-year absence from the group.