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The Associated Press July 24, 2010, 5:48PM ET

Ecuador president imposes oil nationalization law

President Rafael Correa announced Saturday that he will enact a change to Ecuador's hydrocarbons law allowing the government to nationalize oil fields if a private operator doesn't comply with local laws.

The law will go into effect Monday without the approval of the National Assembly because lawmakers failed to meet the time limit set to decide the bill's fate, Correa said.

Lawmakers called a last-minute session before the midnight Sunday deadline, but the president said he would not recognize the meeting because it was not called with sufficient anticipation.

Ecuadorean law allows the president to enact bills the government deems urgent if lawmakers fail to approve, modify or reject them within set time limits.

"The time periods have not been met and on Monday I will send this law to the official registry to be published and take effect," Correa said on the radio program "Dialogue."

Besides allowing for the nationalization of private companies that don't comply with local laws, the legislation aims to change current production-sharing deals to service contracts in which the government owns the oil and natural gas produced.

"With this law, any oil company that doesn't fulfill the policies of the state will see their fields nationalized and they will leave the country," Correa said.

Opponents of the law say it will scare away investment from Ecuador's energy industry, the country's main money-earner.

Correa accused the opposition of obstructing legislative sessions on the law changes for financial reasons.


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