Oil Firms to Aid Poor as Pact Ends Ecuador Strife

QUITO, Ecuador — Protesters who had shut down oil exports vital to Ecuador’s economy struck a deal with energy companies Thursday under which they will end their attacks in exchange for the firms’ boosting investment in the poor communities where they operate.

Negotiations had been snagged over a demand by the militant protesters that they not be prosecuted for dynamiting pipelines and vandalizing pumping equipment last week, said mediator Ramiro Gonzalez, prefect of Pichincha province.

The settlement document did not address the issue of immunity other than to say the protesters, the government and the private oil companies would maintain a “good neighbor” relationship.

Ecuador is South America’s biggest oil supplier to the United States after Venezuela.

Oil companies such as Occidental Petroleum Corp., Petrobras and EnCana Corp. are to pave 160 miles of new roads in the Amazon provinces of Sucumbios and Orellana under the deal, Gonzalez said.

About two-thirds of the 25% income tax paid by the companies is to be steered toward local health, environment and development projects.

Demanding that oil companies invest more in the communities where they drill, the militants crippled Ecuador’s petroleum industry and helped lift world crude prices.

“This settlement solidifies the idea that local community leaders can pressure the central government, through illegal and violent action, into giving those communities what they want,” said Adrian Bonilla, director of Ecuador’s branch of the Latin American Faculty of Social Sciences. “This is not a healthy sign,” he added.

Output from state oil firm Petroecuador climbed to 158,080 barrels Thursday, recovering from the recent slowdown in production but still under the average of 201,000 barrels per day before the attacks.