Cablegate: Ecuador Econ Weekly: New Central Bank Officials; Repsol

VZCZCXYZ0000
PP RUEHWEB

DE RUEHQT #2543 3271831
ZNR UUUUU ZZH
P 231831Z NOV 07
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC PRIORITY 8094
INFO RUEHBO/AMEMBASSY BOGOTA 7118
RUEHCV/AMEMBASSY CARACAS 2773
RUEHLP/AMEMBASSY LA PAZ NOV LIMA 2152
RUEHGL/AMCONSUL GUAYAQUIL 3059
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS QUITO 002543

SIPDIS

SENSITIVE
SIPDIS

TREASURY FOR MMALLOY AND MEWENS

E.O. 12958: N/A
TAGS: ECON EFIN EINV SENV PGOV EC
SUBJECT: ECUADOR ECON WEEKLY: New Central Bank Officials; Repsol
Hints at Arbitration; New Minister of Environment

REF. A: QUITO 2277

B: QUITO 1680

1. (U) The following is a weekly economic update for Ecuador that
describes notable developments that are not reported by individual
cables.

New Officials at the Central Bank
---------------------------------

2. (U) On November 9, the General Manager and Deputy General Manager
and four other high officials resigned from the Central Bank, citing
personal reasons. On November 15, the Central Bank Board of
Governors (which now has a majority appointed by President Correa)
appointed Mauricio Martinez (with 17 years experience in the bank)
as the new General Manager and Victor Campoverde as the new Deputy
Manager. Both recently participated in a study tour sponsored by
USAID where they visited the US Federal Deposit Insurance
Corporation and the Institute of Deposit Guarantee in El Salvador.
Currently one of the major issues facing the Central Bank is a GOE
plan, being led by members of the Central Bank Board, to merge the
Superintendence of Banks with the Central Bank.

Repsol Warns Ecuador of Possible Arbitration
--------------------------------------------

3. (U) On November 15, Repsol of Spain suggested that it might seek
international arbitration over the GOE's move to increase the
State's share of "extraordinary" oil revenues generated by most
private oil firms to 99% (Ref A). Repsol spokesman Federico Cruz
said, "We are ratifying our position to negotiate in friendly terms
with Ecuador; if that fails, we can resort to arbitration." Cruz
implied that Repsol would allow six months to reach an agreement
before seeking arbitration. Repsol is one of Ecuador's largest
foreign operators with a daily output of around 65,000 barrels/day.
GOE officials said they will analyze the case when the Minister of
Petroleum and Mines, Galo Chiriboga, returns from his visit to South
Arabia and Asia.

New Minister of Environment
---------------------------

4. (SBU) In the middle of October, all Cabinet members were
requested to present their resignations to President Correa. On
November 14, the President accepted the resignation of the Minister
of Environment, Ana Alban. The GOE criticized Alban for not
providing immediate answers to the UNESCO announcement to place the
Galapagos Islands in the list of endangered World Heritage sites.
In addition, Alban was censured by Congress when she failed to show
up to defend the presidential shark fin decree in September (Ref B).
On November 15, the President designated Marcela Aguinaga,
previously the Under Secretary of Aquaculture, as the new Minister
of Environment. Aguinaga issued the shark fin decree when she was
Under Secretary of Aquaculture.

JEWELL

© Scoop Media