Wednesday, April 21, 2010

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. [ID:nN20116124]

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. (Reporting by Alexandra Valencia; Writing by Frank Jack Daniel; Editing by Andrew Hay, David Gregorio and Carol Bishopric)

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