Ecuadoran President Confirms Deal to Leave Oil Under Yasuni Park

QUITO, Ecuador, April 26, 2010 (ENS) - President Raphael Correa now has approved an agreement to leave Ecuador's largest oil reserves, amounting to some 900 million barrels, underground in Yasuni National Park in exchange for more than $3 billion.

Under the unprecedented agreement, known as the Yasuni-ITT Initiative, the government of Ecuador will refrain from exploiting the Ishpingo-Tambococha-Tiputini oil field within the Amazon rainforest park, which scientists have determined to be the most biodiverse area in all of South America.

The agreement between Ecuador and the United Nations Development Programme creating a trust fund to receive donations to the Yasuni-ITT Initiative was nearly signed in December at the UN climate summit in Copenhagen, but at the last minute, President Correa instructed his negotiators to hold back until several sticking points were resolved.

President Rafael Correa of Ecuador (Photo courtesy Office of the President)

Now, those issues are settled and the agreement will be signed within the next week to 10 days, according to Ivonne Baki, who now heads the president's negotiations committee for the Yasuni-ITT Initiative.

"It has been reviewed by the president and was approved by the president," she said of the detailed Terms of Reference for the UN Development Programme trust fund.

Ivonne Baki (Photo bySantiago Solorzano)

Baki, a former Ecuadoran ambassador to the United States, told ENS in an interview that the trust fund agreement presented in Copenhagen needed changes to gain presidential approval. "In order for us to get the money from countries, we needed to have an international fund. But that fund was set up not as the president was told it would be, not according to discussions before," she said. "He had to change some of those things."

The agreement now refers not to "donors," a term President Correa found unsatisfactory, but to "contributors."

"Ecuador is a contributor, other countries are also contributors," Baki said.

In addition, President Correa insisted that Ecuador have a majority on the trust fund board of directors. Under the revised agreement, there will be three board members from Ecuador, two board members from contributing countries, and one position representing civil society that was not there in the previous version.

Finally, under the previous version, all decisions of the board had to be by unanimous consensus, which allowed any one person to veto a measure, bringing the whole process to a halt.

Rainbow over Yasuni National Park (Photo by Miguel Martin)

Under the revised agreement, decisions will be reached by consensus if possible, but if that is not possible, by majority, Baki said.

Getting the agreement right is very important, said Baki, because it could be an example to be followed by other countries in the same position as Ecuador.

"A biodiverse developing country that has oil underneath that we don't want to touch," she said, "Imagine, we could contribute this to the world. This is a different kind of sustainable development."

"Really we need Yasuni to be known all over the world," said Baki, and she has assurances from some of the biggest names in the entertainment world that they will support and help to publicize the Yasuni-ITT Initiative.

Actors Leonardo Dicaprio, Edward Norton, Glenn Close, Daryl Hannah and Chevy Chase told Baki and Ecuadoran Vice President Lenin Moreno during a four-day conservation conference at sea that they would back the Yasuni-ITT Initiative.

Baki said, "They are lending their names and the moral support that we need to make Yasuni known in the world."

Former U.S. Vice President and Nobel Peace Laureate Al Gore will come to Ecuador in November to give a conservation conference, she said.

A harpy eagle flies over Yasuni National Park. (Photo courtesyNapo Wildlife Lodge)

All of this attention is focused on an area of the Amazon rainforest that Baki calls "amazing."

"Once you have been there, you feel you have seen God," she said.

"We were flying by helicopter over the greatest variety of trees unimaginable," Baki told ENS, "when all of a sudden there was a red tree, all of a sudden a yellow tree, and all different kinds of birds."

"We went down a river by canoe to find most amazing variety of plants, trees, animals, monkeys, small monkeys, nature living together in harmony. And on top of that the communities - there are two groups of indigenous people who voluntarily are uncontacted, but there are other communities that have done an amazing job, incredible things with the trees, with artisanal products,

Baki stayed at the Napo Wildlife Lodge by Anangu Lake in Yasuni National Park, within the ancestral territory of the Anangu Quichua Community.

Napo Wildlife Lodge, Yasuni National Park (Photo by Tea Rose)

The community manages the lodge, which Baki described as having "the most beautiful food, hotel, nature. They only ask 'please keep this place.' You feel you are in another world," she said.

Near the lodge are two parrot and macaw clay licks, 565 bird species, 11 species of monkeys, giant otters and other large mammals such as Brazilian tapirs, white-lipped peccaries, and all species of cayman.

For years, conservationists around the world and indigenous communities who live in the park have been urging protection of Yasuni. "What will happen when our children grow up? Where will they live when they are older? Our rivers are tranquil and in the forests we find the food, medicines and other necessities that we need. What will happen when the oil companies finish destroying what we have?" Waorani community members wrote to the President of Ecuador in July 2005.

To "keep this place" free of oil development, Ecuador will issue Yasuni Guarantee Certificates to contributors to the Initiative, as a guarantee that an estimated 900 million barrels of oil, worth US$6 billion will remain in the ground for an indefinite time period.

The value of the certificates will be a multiple of the metric tons of avoided carbon dioxide emissions.

"This is a negotiable instrument that does not earn interest and does not have an expiration or maturity date, since the guarantee is in perpetuity and will be redeemed only in the event that the Ecuadorian government decides to start the oil exploration and production within the ITT fields," the government of Ecuador says on its website.

The donations to the Yasuni-ITT Trust Fund will come from two main sources - voluntary contributions and transactions in the carbon market.

The voluntary contributions can come from governments of countries, international or multilateral organizations, civil society organizations, private sector companies, and citizens worldwide.

Copyright Environment News Service (ENS) 2010. All rights reserved.

Ecuadorean court issues warrant for Santos' arrest

ColombiaReports.com, April 26, 2010

A court in Ecuador on Monday issued a warrant for the arrest of Colombian presidential candidate Juan Manuel Santos for his involvement in the cross-border military operation that killed FARC leader Raul Reyes in March 2008, according to El Espectador.

During the hearing in the city of Lago Agrio, capital of the Sucumbios region of Ecuador, the prosecutor announced that he would insist that the National Court of Justice (Ecuador's highest court) processes Santos' extradition.

The court in Sucumbios also ordered the arrest and investigation of the commander of the Colombian military, Freddy Padilla.

Last week, Ecuadorean President Raphael Correa warned Colombia against any repeat attack, saying that Ecuador's military is "prepared" for such an operation.

Santos' statement was also heavily criticized by Venezuelan President Hugo Chavez, who called the presidential hopeful a "threat" to the region.

The Ecuadorean judge in charge of the case ruled in February that there wasn't enough evidence to pursue the case against Santos.

However, in early March Judge Francisco Revelo decided to re-file the charges against the former defense minister.

Ecuador's Foreign Minister Ricardo Patiño said last week that his nation will not engage in any more dialogue to normalize relations with Colombia until after the latter's upcoming May presidential elections.

Ecuador’s authorization of generic HIV/AIDS drug applauded by US consumer watchdog, calling for others to follow

April 26, 2010

Ecuador’s patent office issued a “compulsory license” for lopinavir/ritonavir, an important HIV/AIDS medicine. The license authorizes generic competition with the patented drug. While the patented version, sold under the trade name Kaletra by US health care major Abbott Laboratories, costs Ecuador’s public sector roughly $1,000 per person per year, Ecuador will soon be able to access generics at half that, noted the consumer group.By opening the door to competition from generic drugmakers, Ecuador is making a critical HIV/AIDS drug much more affordable for that country’s public treatment programs - a move that other countries should follow, the US consumer watchdog Public Citizen has declared.

“Ecuador is setting an example for countries that seek to expand access to lifesaving medicines, but struggle to pay for ever-more expensive drugs,” said Peter Maybarduk, director of Public Citizen’s new Access to Medicines Program. “Competition has consistently proven the most effective way to lower the prices of medicines. Countries should count compulsory licensing among their essential public health policy tools,” he argued.

Compulsory licenses authorize the use of patented technology under enumerated conditions. They do not eliminate or override patents, and the patent holder - in this case, Illinois-based Abbott - will receive royalties. Many countries have used such licenses to promote public interest objectives and to remedy anti-competitive practices in a variety of sectors. In recent years, a number of countries have issued compulsory licenses to improve access to medicines, including Thailand, Brazil, Malaysia, Eritrea, Mozambique and Indonesia, among others.

The USA is perhaps the world’s most frequent user of compulsory licensing, including the government use of defense technologies, and judicially issued licenses to remedy anti-competitive practices in information technology and biotechnology, among other instances, Public Citizen alleged..

Action cuts price of the drug by 27%

Ecuador’s compulsory license immediately reduced the cost of a major public HIV drug purchase last week by 27%. Prices are expected to drop much further soon, as Ecuador licenses more competitors to enter the market. Ecuador laid the groundwork for the license last fall, when President Rafael Correa declared access to priority medicines to be a matter of public interest.

More recently, the country's Intellectual Property Institute issued an Instruction on the Granting of Compulsory Licences for Patented Drugs, in accordance with local IP legislation and is open to receive applications for the grant of compulsory licences, whether for commercial or non-commercial public use. It is for the applicant to show that the product or medicine which it will produce or import is primarily intended for supply within the domestic market. In the case of an application for commercial public use, the applicant must show that it tried to obtain authorization from the rights holder on "commercially reasonable terms and conditions" and that a favorable response was not obtained within a period of 45 days.

Generics have cut price of ARVs from $10,000 to $100 a year

Over the past 10 years, generic competition has produced a revolution in HIV/AIDS treatment, reducing prices for first-line antiretroviral medications from about $10,000 per year to about $100 per year and enabling more than four million people worldwide to access treatment. But high prices continue to limit access to the patented second-line medicines that many people living with HIV need, including lopinavir/ritonavir.

A UNAIDS 2008 country report estimated that 42% of Ecuadoreans needing antiretroviral therapy received it. Ecuador’s national HIV/AIDS treatment program will expand public access to treatment this year, aided by savings from the compulsory license, said Public Citizen.

Compulsory licensing is an integral component of international intellectual property rules. The right of countries to issue compulsory licenses is enshrined in the World Trade Organization’s TRIPS Agreement of 1995 and a unanimous Doha Declaration of 2001 on intellectual property and public health. The WTO’s Doha Declaration also states, “the [TRIPS] Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all.”

Scientists investigate Ecuador's receding glaciers

By James Painter BBC News, Quito

Studies suggest Ecuador's glaciers are rapidly shrinking

Ever since the German explorer Alexander Von Humboldt visited Ecuador in 1802, foreign visitors have been drawn to its majestic volcanoes with delightful-sounding names like Cotopaxi, Chimborazo and Cayambe.

Scientists studying them are reluctant to predict how many more decades visitors have left to see the glaciers which crown the volcanoes.

There are too many uncertainties involved, the experts fear, and they are worried that many are losing their glacial cover at an alarming rate.

A study to be published this year by Ecuadorean glaciologist Bolivar Caceres suggests that the country's glaciers lost more than 40% of their surface area between 1956 and 2006.

For example, the Cotopaxi mountain with its famous volcanic cone has lost 40% of its glacial cap since 1976.

'Abnormally high temperatures'

And one of the glaciers on the nearby mountain called Antisana has also retreated by nearly the same amount in the last 50 years.

"There's been a definite acceleration since the 1980s, which is consistent with what's happening to tropical glaciers in other parts of South America and the world," says Mr Caceres.

At more than 5,000m (16,400ft) high, tropical glaciers are particularly sensitive to a changing climate. During El Nino, which tends to bring hotter temperatures, the glaciers melt.

On the other hand, during La Nina, which is associated with colder weather and more precipitation, some of the glaciers can advance or stabilise.

"The last few months have been particularly unusual," says Bernard Francou, a glaciologist from the French Development Research Institute (IRD), who has been studying Ecuador's glaciers since 1994.

"We have had the lowest precipitation for more than 40 years," Mr Francou told the BBC. "And temperatures have been abnormally high."

He says that as a result the snowline on Antisana is currently 300-400m higher than normal at 5,300m.

There is a link between a weak El Nino weather event in recent months and the higher snowline, he believes.

Mathias Vuille, a climatologist from New York State University at Albany, says "yearly variations can be best explained by the El Nino/La Nina cycle, but the long-term trend of retreating glaciers is best explained by anthropogenic climate change".

Crucial role

Mr Vuille and others working in the Andes have tracked temperature changes in the last 70 years to show that there has been an average warming of near-surface air temperatures of around 0.10C per decade and an overall increase of 0.68C since 1939.

The gradual disappearance of the glaciers is not just a matter of aesthetic regret. Several Andean cities are thought to be dependent on the melting glaciers for part of their drinking supply, particularly in the dry season.

However, recent studies suggest that at least in the case of Quito, the Ecuadorean capital, which which has a population of 2.4 million people, the contribution of glacial melt from Antisana and Cotopaxi to its water supply may not be as high as previously thought.

Marcos Villacis from Quito's National Polytechnic School leads a team of researchers who have been studying the water supplies to the capital.

Glaciologist Bernard Francou warns of unusual weather in the region

"Preliminary estimates suggest that between 2% and 4% of Quito's annual water provision comes from the glaciers," Mr Villacis told the BBC. Precipitation provides by far the most amount of water.

Some studies had previously suggested that the figure was at least 10%, and possibly as high as 35%.

However, Mr Villacis is at pains to stress that the melt water from the glaciers plays a crucial role in supplying water to the high Andean grasslands known as paramos, which act like an enormous sponge in absorbing and releasing water.

"On Antisana, at the altitude of 4,000m, the contribution to the paramos from glacial melt could be between 20% and 35%, and is particularly important in the period November to February when there is not much precipitation," he says.

Water demand

Ecuador's glaciers have a much smaller total surface area than, for example, those in neighbouring Peru and nearby Bolivia.

Both countries are also losing their glacial cover at a similar rate to Ecuador.

Recent studies by a young Bolivian researcher, Alvaro Soruco, suggest that since 1975 glaciers in Bolivia's Cordillera Real have lost half their volume.

Mr Soruco calculates that melt water from the glaciers contribute an average 15% of the water supply to the cities of La Paz and El Alto, and up to 27% in the dry season.

In Peru, it is still not known how much water is provided by melting glaciers to the capital, Lima, which is one of the most "water-stressed" cities in the world as it is built on a desert.

But scientists do know that the melting ice from the huge Cordillera Blanca range in Peru provides significant amounts of water via the Rio Santa valley to hydroelectric dams, export agriculture in the lowlands and the coastal city of Chimbote.

Studies suggest that glacial melt can provide 10% to 20% of the total annual water run-off into the Rio Santa valley. This figure can rise to 40% in the dry season, when water is most in demand.

Back in Quito, Mr Villacis is convinced that scientists need to study the Andean grasslands as much as the melting glaciers.

"We should be just as worried about the effect of higher temperatures on the paramos," he says.

"We know there is going to more demand for water as the population increases. But we don't know how climate change and less water from glaciers will affect the capacity of the paramos to absorb and supply water."

Ecuador names new finance, energy ministers

* Economist Rivera replaces Viteri as finance minister

* State oil firm head replaces Pinto on energy portfolio

* Part of President Correa's wide cabinet reshuffle

QUITO, April 21 - The head of a state oil company became Ecuador's energy minister on Wednesday and a young economist took over as finance minister, part of a deep cabinet reshuffle.

The chief of Petroamazonas, Wilson Pastor, told Reuters he would be the next energy minister of the South American oil-exporter, which has the rotating presidency of OPEC.

President Rafael Correa on Tuesday removed Germanico Pinto from the post in a cabinet reshuffle that also cost Finance Minister Elsa Viteri her job.

The changes at the ministries are not expected to lead to major shifts in Correa's state-centric policies. They come as Ecuador's economy lags government growth forecasts, Correa's popularity softens and the Leftist leader loses patience with talks aimed at securing new contracts with private oil firms.

Viteri was replaced by 31-year-old Patricio Rivera, an economist with a state planning office.

"Lack of sufficient tenure at the head of the ministry of finance, which a key position, is a definite drawback to the cohesiveness of economic policy," said Alberto Bernal, head of research at Bulltick Capital Markets in Miami.

"Hopefully this new blood in the finance ministry will help president Correa come up with policies more in line with the marketplace. Ecuador is in dire need of financing and his policies so far have not helped attract investment," Bernal said.

The country has been cut off from the international capital markets since 2008, when it declared $3.2 billion in global bonds "illegitimate" and defaulted on the obligations.

Outgoing finance minister Viteri, like Correa a leftist economics professor, was unpopular with Wall Street for her central role in that default.

The cabinet reshuffle coincides with government threats to take over the operations of private petroleum companies unless they sign the new deals favoring the state.

The new contracts are to be aimed at ending profit-sharing deals with foreign companies and turning the firms into service providers.

Correa had already replaced nine ministers this month after telling the whole cabinet to submit resignation letters.

Incoming oil minister Pastor now takes over as head of OPEC. The position of OPEC chief is mostly symbolic and lacks significant policy-making weight.

Correa, a U.S.- and European-trained economist, took office in January 2007 and his popularity rating rose above 70 percent in his first years as he redistributed wealth to the poor and took a tough stance against foreign investors.

But his ratings have sunk below 50 percent since, largely because of a slow economy as the country's oil revenues were battered by the global economic slump and a fall in petroleum demand.

Ecuador Indians Renew Protests Against Proposed Water Law

QUITO – Ecuadorian Indians demonstrated again on Wednesday before the doors of the National Assembly to reject reports that they are supporting a bill on management of water resources.

The Indians, most of them members of communal irrigation boards in the Andean provinces of Tungurahua and Cotopaxi, gathered before the building, where a police cordon prevented them from gaining direct access to it.

The demonstration was staged to protest the approval of a definitive report on the bill, which now will move to debate in the full Assembly and which, according to media accounts, does not include any of the proposals recently presented by the indigenous movement.

The demonstration on Wednesday is part of the ongoing mobilization announced by the indigenous movement in February and the process of “vigilance” being conducted with regard to several measures being promoted by the government of center-left President Rafael Correa.

Sources with the indigenous movement confirmed to Efe that a group of demonstrators received access to the Assembly to meet with the Food Sovereignty Committee, which is reviewing the bill.

The protest comes after one on April 8, when there were some minor scuffles because the Indians tried to gain access to the building by force.

Then, Assembly speaker Fernando Cordero authorized the entrance of a group of the demonstrators so that they could attend the debate in the section of the chamber reserved for the public and he decided to postpone the delivery of the definitive report to be able to take into account the requests of the Indians.

The indigenous movement fears that the bill will include articles that could allow a possible privatization of water, although this has been denied repeatedly by both the government and lawmakers.

Some leaders of the Confederation of Indigenous Nationalities, or Conaie, the most important social organization in Ecuador, have warned that the protests will be increased gradually and they do not rule out a nationwide uprising against several government policies. EFE

Ecuador highlights ALBA Summit agreements

PL - Ecuador: Ecuadorian Foreign Minister Ricardo Patiño highlighted the significance of the recently concluded Summit of the Bolivarian Alliance of the Peoples of Our America (ALBA) in Caracas and the need to strengthen regional political integration Tuesday .

Patino said that the final document of the Summit insisted on demanding an immediate, unconditional end to the nearly 50-year-old US blockade against Cuba, in a press conference in Quito.

“More condemnation of this policy is impossible, as it is an emblematic case in which the entire world has been demanding for decades the United States to end the blockade that harms so much the Cuban people,” he said.

Considering ALBA as a Latin American pro-integration body also seeking participation of peoples and social organizations, a summit with indigenous and African descendant authorities was called.

It will be held in Otavalo, in the Ecuadorian province of Imbabura, on June 3-4 this year, said Patino.

Indigenous and African descendent authorities of ALBA member countries are expected to attend this summit to discuss their interests and regional integration-related proposals.

Ecuador calls off dialogue until after Colombian elections

ColombiaReports.com, April 21 2010

Ecuador's Foreign Minister Ricardo Patiño said Tuesday that his nation will not engage in any more dialogue to normalize relations with Colombia until after the latter's upcoming May presidential elections.

Patiño said that Ecuador found presidential candidate Juan Manuel Santos' comment that he was "proud" of the Colombian army's 2008 bombing of a FARC camp on Ecuadorean territory "unacceptable."

"It is unacceptable that a presidential candidate is taking advantage of this electoral process to reinforce arguements condemned by the international community, to say that he would again attack the FARC, wherever they were," said Patiño.

"We deeply regret that a process of the resumption of diplomatic relations between the two countries, as desired by our two peoples, could be affected by these statements," Patiño added.

The foreign minister said that Santos' comments were very serious from the point of view of resuming relations, because "they suggest to us that if he were to be elected president, members of the FARC may enter our territory again and we could be bombed again."

Patiño said that the principles of international law were not like a shirt that could be put on at the wearer's whim, but had to be respected.

"Respect for state sovereignty is a principle of international law that is unacceptable to violate, in order to make the most of an election campaign," Patiño said.

Ecuadorean President Rafael Correa on Tuesday warned Colombia against a repeat of the 2008 attack, saying that his country's military is "prepared" to respond to such an event.

The international ruckus comes after Santos said during a live presidential debate Sunday, that he was "proud" of his decision as defense minister to authorize the attack and that he has "left open the possibility" of a repeat attack.

Santos backed down on Tuesday and said he wouldn't authorize another such attack. His about-face followed a statement released by Venezuelan President Hugo Chavez calling him a "threat to the region."

Colombia's 2008 bombing of the FARC camp on Ecuadorean soil, in which FARC leader "Raul Reyes" was killed, led to the freezing of diplomatic relations between the neighboring Andean nations, with Ecuador claiming that Colombia had undermined its sovereignty.

The two nations began to work at restoring severed ties in September last year.

A "Commission on Sensitive Subjects" was formed at at a heads of states' meeting in Mexico in February, with the intention of addressing contentious issues between the two countries.

Ecuador has said that the restoration of diplomatic relations with Colombia is dependent on Colombian authorities providing more information on allegations of FARC activity within Ecuador's borders, as well as handing over Raul Reyes' hard drives and other evidence allegedly found during the 2008 raid.

Colombia said that handing over the hard drives belonging to slain FARC leader is not possible, because the prosecutor general is using them as evidence.

Ecuador has filed charges against Santos for his role in the incursion.

Colombia's presidential elections are scheduled for May 30.

Ecuador goes to Cannes with forest carbon bonds

Carbon Positive, Wednesday, 21 April 2010
Ecuador is taking its innovative forest carbon financing initiative to the Cannes Film Festival in May in the hope of showcasing the project to prospective investors.

The Yasuni-ITT Initiative aims to create ‘carbon bonds’ to preserve a tract of in the Ecuadorian Amazon rainforest that also holds a lucrative oil resource ripe for exploitation. The carbon bonds would be issued over a government guarantee that oil won’t be extracted from the Yasuni National Park and the forest, its biodiversity and way of life of untouched indigenous groups preserved.

If bond sales can raise enough to replace at least half of the $7 billion that stands to be foregone in oil licence royalties, then the government will not allow drilling to go ahead. Success would also deliver 407 million tonnes of emissions reduction savings, primarily from the avoided extraction and burning of 846 million barrels of oil under the reserve.

Earlier this month, Ecuadorian President Rafael Correa approved the terms of an international trust fund that would be set up to issue the carbon bonds, Interpress reports. Meanwhile, environment groups and government officials are investigating reports that oil interests are defying a ban on activities in the southern “untouchable zone” of the Yasuni National Park. Acción Ecológica, a local environmental group, told Interpress that construction of an oil pipeline into the park from existing oilfields outside the park had begun.

Ecuador says the EU, Germany and Spain have already indicated support of the Yasuni preservation fund with some funding commitments so far made. To raise further investment, Ecuadorian government is backing a promotional event at Cannes to raise the profile of the initiative among the Western world’s rich and famous. Already, Leonardo di Caprio, Prince Charles, Mikhail Gorbachev, Daniela Mitterrand, Desmund Tutu are already said to be supporters.

The artistic and speaking event at Cannes, May 12-23, will involve those involved in the movies Crude and Avatar and is being organised by the Nature Rights group and volunteers. Further sponsorship and collaboration for the event is sought.

Contact:
Coordinator Yasuni-ITT European Civil Society and Market Technical Advisor, Ministry of Patrimony, Ecuador
lwarnars@gmail.com

Ecuador removes OPEC chief as oil minister-sources

* Ecuador removes OPEC President Pinto as energy minister

* Finance minister Viteri, key in debt default also out

* No major shift in OPEC policy seen with new president (Adds context on oil negotiations paragraph 4, 12)

By Alexandra Valencia

QUITO, April 20 (Reuters) - Ecuador's President Rafael Correa on Tuesday removed OPEC president Germanico Pinto from his post as Ecuador's energy minister in a cabinet reshuffle that also cost the country's finance minister her job.

Correa accepted the resignation of Finance Minister Elsa Viteri, who vacated her office on Tuesday, and the president also told Pinto by telephone his resignation had been accepted, sources close to the two officials told Reuters.

Correa had already changed nine ministers this month after telling the whole cabinet to submit resignation letters. He has been accepting their resignations one by one. The key Economic Policy and Strategic Sectors minister also was replaced.

The resignation of the country's top energy official came as Ecuador makes sluggish progress on renegotiating oil contracts with foreign companies. Correa says he is prepared to nationalize foreign oil operations if companies do not sign new contracts favoring the government.

Pinto was current OPEC chief, a post that rotates on an annual basis among member countries. The position is mostly symbolic and lacks significant policy-making weight.

Pinto is currently on a trip to South Korea, where he was informed of the decision to accept his resignation, one of his advisors said, adding he may be replaced by Wilson Pastor, the head of an Ecuadorean state-run oil company Petroamazonas.

"Politicians change all the time, but oil policy tends to turn as easily as an oil tanker, so it would be surprising to see any major policy shifts," said Lawrence Eagles, head of commodities research at JP Morgan.

"For OPEC, because Ecuador is such a small country, the change is insignificant."

Viteri, like Correa a leftist economics professor, was unpopular with Wall Street for her central role in the nation's 2008 default of $3.2 billion in global bonds.

"The departure of Minister Viteri should not be seen as the harbinger of a more conventional and orthodox policy approach as macro policy is and will continue to be ultimately defined by President Correa," Goldman Sachs analyst Alberto Ramos said.

European-trained economist Correa took office in January 2007 and his popularity rose above 70 percent in his first years in office as he redistributed wealth to the poor and took a tough stance against foreign investors.

But his ratings have sunk below 50 percent since, largely because of a sluggish economy as the country's oil revenues were battered by the global economic slump and a fall in petroleum demand.

Q+A-What's going on in Ecuador's oil sector?

QUITO, April 20 (Reuters) - President Rafael Correa has threatened to take over the operations of foreign oil companies in Ecuador unless they sign new contracts intended to increase state control over the sector.

How serious is the situation?

WILL CORREA NATIONALIZE?

The leftist leader, who says he is championing Ecuador's right to handle its resources as it sees fit, says the government is losing money every day contract talks drag on.

The negotiations, aimed at turning private companies into service providers, are moving slowly and the government is hungry for cash since being cut off from the international capital markets after its 2008 global bond default.

While analysts say there remains room for private companies to negotiate before the government expropriates their operations, Correa proved he was willing to play tough with investors when he ordered the $3.2 billion bond default.

"We have seen this strategy before: Elevate the rhetoric and raise the ante before important negotiations only to compromise at a later stage," said Albert Ramos, who analyses Ecuador for Goldman Sachs in New York.

Ramos said he believed the companies should take Correa very seriously this time because of his nationalist policies for oil.

"He would likely have no problem in taking over more assets from the private oil companies," he said. "But that would, in my assessment, be a policy mistake and a recipe for oil production decline, given the known operational, technological, and managerial inefficiencies of state-owned Petroecuador."

WHAT PRECEDENTS ARE THERE?

Ecuador's feuds with foreign oil companies in recent years include the takeover of local assets of U.S. oil company Occidental Petroleum. The government declared Oxy's contract had expired and its concession should be returned to state control.

Citing a tax dispute, the government last year also took charge of the operations of two oil blocks belonging to French oil company Perenco.

Under a new constitution, Correa has widened authority over key "strategic" sectors like mining and oil. Gold, copper and silver exploration is resuming in the mineral-rich Andean country under a new legal framework.

Mining companies are being allowed to restart exploration, once their operations conform with new rules that strengthen environmental regulations and increase government control. Major exploration was suspended in 2008 while the mining regulations were being drawn up.

WHICH COMPANIES COULD BE AFFECTED?

Spain's Repsol, Brazil's Petrobras, Chinese consortium Andes Petroleum and Italy's Eni are the main foreign players operating in the Andean country.

Foreign companies account for about 40 percent of Ecuador's total daily production, with the rest accounted for by state entities Petroecuador, Petroamazonas and Rio Napo.

HOW WOULD EXPROPRIATIONS WORK?

Correa said he planned to send a bill to Congress that would allow in principle for the expropriation of oil fields if the companies do not sign the new contracts.

Correa wants foreign oil companies to give up their profit-sharing deals and sign new contracts under which they would become service providers. He also sides with indigenous groups that have brought a $27 billion environmental damages lawsuit against U.S. petroleum company Chevron Corp, which no longer has operations in Ecuador.

HOW BIG IS THE ECUADOR MARKET?

Ecuador, which has the rotating presidency of the Organization of the Petroleum Exporting Countries this year, produced an average 486,067 barrels per day last year, marking a 3.7 percent drop compared with 2008.

Foreign investment flows have eased during the renegotiations. Exports from private companies sank 27.6 percent last year from 2008 to 98,869 bpd, while private output fell 14.4 percent to 204,511 bpd.

Oil is Ecuador's chief revenue earner. Reversing a decade-long slide in output is a key challenge for Correa, who started his second term in office last year.