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Ecuador closing door on Correa era

3 Oct 2017, 5.48 pm GMT

Ecuador closing door on Correa era

Quito, 3 October (Argus) — Ecuador's new president Lenin Moreno is forging an unexpectedly bold political path following the imprisonment of once-powerful vice president Jorge Glas late last night.

Glas turned himself in to police in Guayaquil and was immediately flown to Quito and jailed at a small white-collar detention center known as Prison 4.

Glas' pre-trial detention was ordered yesterday by a national justice court judge at the request of Ecuador's attorney general as part of a corruption investigation tied to Brazilian contractor Odebrecht. The firm has admitted paying bribes to secure major energy and infrastructure projects across Latin America.

As Glas was preparing to give himself up at the Guayaquil air force base, Moreno announced plans for an anti-corruption plebiscite that could effectively end the career of his predecessor and political godfather Rafael Correa and his number-two Glas.

The plebiscite to be held in December or early January will feature seven consultations, including the lifelong suppression of political rights for public servants convicted for corruption, the prohibition for corrupt companies to be awarded contracts with the state, and an amendment to abolish indefinite reelection.

If successful, the poll would block Correa´s bid to return to office in a fourth reelection after Moreno´s term ends in 2021.

Correa led the country for a decade until Moreno took office in May. Both are the maximum leaders of the leftist Alianza País movement, but have publicly split since Moreno launched an anti-corruption and reconciliation agenda.

Following Glas' detention, Correa, who accuses Moreno of betrayal, said on Twitter that "an honest man has lost his freedom. The earth must shake."

Moreno had already stripped Glas of his duties in August, after which the national assembly voted unanimously to lift his immunity to allow prosecutors to investigate his alleged links with Odebrecht corruption and bribery.

The investigation involves five infrastructure projects built by Odebrecht in the last decade, including earth-moving and construction of a water system at the site of the long-delayed 300,000 b/d Pacific refinery (RDP) project, the 60MW Manduriacu hydroelectric plant inaugurated in March 2015, the Daule-Vinces water and irrigation project inaugurated in December 2015, and the Pascuales-Cuenca refined oil products pipeline. The pipeline remains unfinished and has been found to have multiple construction defects.

The consultation will also feature a question to reduce by a third the acreage open for oil development inside the 1mn hectare Yasuni national park, in Ecuador's Amazon rainforest, and increase the protected area by 50,000 hectares. The reduced park area open for development would cover 300 hectares, down from 1,000 hectares.

The reduction is not likely to affect development of the Ishpingo-Tambococha-Tiputini (ITT) heavy crude complex, partially located inside the Yasuni, an official of state-owned PetroAmazonas told Argus.

PetroAmazonas is using cluster and horizontal directional drilling techniques at ITT, limiting to 26 the number of platforms needed to drill some 651 wells, according to the company's latest development plan.

The ITT complex holds an estimated 1.7bn-2bn bl of 14˚-15.5˚API reserves and is key to achieving Opec member Ecuador's goal of boosting production to 700,000 b/d by 2021, from a current 530,000 b/d.

The bulk of the effort will rest on PetroAmazonas. The company should increase its production by at least 20,000 b/d in 2018. Tiputini started production in September 2016 and is now yielding 47,000 b/d. Tambococha is scheduled to start production in 2018 and add some 60,000 b/d. In 2019, PetroAmazonas plans to launch drilling at Ishpingo, which could add a further 140,000 b/d.


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