Ecuador's President Rafael Correa said on Saturday the government would suspend contracts with any foreign oil company found to have needlessly damaged the environment. "Any company ... state-run or private, that unnecessarily (damages) Ecuador's environment, or does not fulfill its contract, will face sanctions," Correa said in his weekly radio address.

Correa, a 43-year-old former economy minister, has made investors nervous by pledging to limit debt payments and rework foreign oil contracts to raise the government's share of booming oil revenues. He said the government is investigating suspected irregularities committed by companies involving pollution in the country's Amazon jungle region. The probe could be focused on Brazil's Petrobras, which is developing oil block 31, located at the heart of one of the world's biggest protected natural reserves.

"But of course, if we find out that Petrobras or any other company has committed irregularities we will terminate their contracts," said Correa. In 2004, Petrobras won a license to explore block 31, part of which is located in a reserve considered one of the world's most bio-diverse areas and home to tribes who have maintained the same way of life for thousands of years.
(Planet Ark, 05/02/2007)