PetroEcuador to Cut 1,500 Jobs

LAHT, 23 January, 2008

QUITO -- State oil company Petroecuador will carry out a restructuring plan that includes eliminating 1,500 jobs, Ecuadorian President Rafael Correa said, adding that just $3 billion will be earmarked for the firm this year to fund ongoing projects.

Correa, who held a meeting Thursday with Petroecuador's board, told reporters the job cuts were regrettable and said the number of jobs lost could vary once the recommendations of a study carried out by U.S. research and consulting firm Wood Mackenzie are adopted.

The president said that for the government "it is very painful that there are people who will lose their jobs, but more painful yet is that it is a blow to the common good, just as was the irresponsibility of the different governments who used Petroecuador as part of a political spoils system" and increased its payroll.

The government "has to look out for the common good; we won't leave them alone, but Petroecuador can't continue with 5,000 people," Correa said.

The president also said that Ecuador will earmark $3 billion this year - a drop of nearly $2 billion from the amount approved for 2008 - for Petroecuador's operating costs and ongoing projects, noting that the global financial crisis makes it impossible to raise that budget for the carrying out of new projects.

"We're prioritizing (ongoing) projects, but obviously if Petroecuador wants to invest in other projects it can invest in whatever it wants as long as it can obtain financing through bids and strategic alliances," Correa said.

Oil is Ecuador's main export, and the Andean nation currently produces an average of about 500,000 barrels per day of crude, of which state-owned Petroecuador accounts for just over 50 percent.

Revenue from oil exports finances roughly 35 percent of Ecuador's public spending. EFE