After 10 years of discussion, and one and a half year of construction, you are almost there… at 93% of completion. When will the OCP be finished, and what were the events that brought together 7 major oil and gas companies to form this consortium?

The stars were aligned when the OCP was born -everybody was at the right place and the right time for this project to flourish. The sponsors were comprised of leaders who were committed to make this project happen, to overcome all the obstacles, and to contribute to Ecuador's development, in spite of all the risks. We now expect to be finished construction and to load the first tanker by the end of June this year.

I believe that it was not only economic and political reasons which legitimized the construction of the OCP, but it was the combination of personalities who made it happen, both from the private sector and the public sector.
Ecuador is a difficult place to do business, in the sense that the country is still maturing and evolving. Laws and regulations continue changing and law enforcement remains a deep concern.

Has the legal system improved for foreign investors, and what is missing to set clear rules and guidelines?

Ecuador has a constitution that has promoted increased freedom and foreign investment, while supporting the rights of local communities, indigenous peoples, afro-american groups and minority groups. The peoples have a special place in the constitution and are guaranteed a positive role in the economy, especially in the oil sector.

In practice, there is a fine line between the interests of these groups and the interests of the country. Certain minority groups are prevailing over the interests of the country as a whole, which is a reflection of the need for strong political determination to push this country forward and to fix the institutional weaknesses of the country.

Ecuador should establish a policy for the future which we can all agree on. In order to reach consensus, I believe that we need to bring together all major political parties, minority groups, civil society, economic agents and government officials in order to set a minimum framework to move ahead together.

What was your reaction to the opposition by indigenous and environmentalist groups, as well as the Goodland report, which pressured financiers of the OCP when it was thought that the Oleoducto de Crudos Pesados (OCP) pipeline failed to meet World Bank environmental and social standards?

First of all, I want to clarify that the financing of OCP was never at risk. Our financing structure has its own legal framework, which was set up with the same international guidelines as if the pipeline was built in Texas.

Another factor is the environmental aspect. We must first recognise the people behind the campaign against the OCP are simply radical activist groups. They do not include any credible or responsible NGO, and as a matter of fact we have good relationship with all of the serious NGOs that are working here in Ecuador. We have set an example by creating a unique $16,930,000 Million Eco-Fund, which is the first conservation fund of its kind in Latin America. We are also addressing the issues that concern environmental groups, such as re-vegetation and control of access to roads in order to prevent damage to the Amazonian forest by third parties. We are working together with the community to find solutions to their concerns, to provide them with information and to support them through sustainable environmental practices.

The Goodland Report was factually incorrect. However, OCP has promoted meetings with NGOs and Dr. Goodland, to respond to valid concerns. We are an open company and will continue addressing these issues with stakeholders.

Our top priorities are: Safety, Environment and Quality, in that order. We have an outstanding record in terms of safety, which combines with our concern for the environment as well as the quality of our project.

Do you believe that the IVA re-imbursement issue is going to be a major test to see if the current government is serious about attracting foreign investment?

I don't speak for IVA. Upstream companies do. I told President Gutierrez that his speech is headed in the right direction, and his visit to Washington is a proof of this. However, it remains to be seen whether his speech materialises into government action.

Law enforcement continues to be a problem, and the President has affirmed that legal stability is one of his major concerns.

We are constantly facing challenges. Two people from our Community Relations department were kidnapped in June 2002, and later rescued thanks to a military operation of more than 100 officials to release our employees. Yet after this, nothing happened to move the legal process forward and to bring the guilty parties to justice, notwithstanding the fact that the criminals have been identified by the Police.

However, we believe in this country, and that is why we are here. However, I also believe that it is important for the country to face the facts and address these issues.

In 2003, the OCP will run at 50% capacity. What is the strategy for this, and what is your revenue expectation for the first year?

We are going in the right direction. OCP is seen as Ecuador's main project, bringing in $1.4 Billion in investment and spinning off major job opportunities for the country.

Indeed, the OCP is only the tip of the iceberg - and that is why we are launching a new era in terms of oil potential of the country. Ecuador has the proven oil reserves, and as long as there is no further unreasonable limit established by activist groups, or law enforcement issues, or changing policies, coupled with straight actions towards eliminating public monopolies and fostering foreign investments. These reserves can turn into actual development for Ecuador in the medium term.

The OCP will start operations by transporting approximately 220,000 barrels per day, which is about 50% of its capacity. Now the ball is in the government's court: they have the reserves, we have set the infrastructure for transport services, and the interest exists on the part of foreign investors. What is missing? Investors are willing to take the risk now that the OCP is completed, so now it is up to the government to take certain actions needed in order to initiate new business opportunities in the sector.

The reasons to develop the oil sector are clear: if you estimate that the average oil price is $15 per barrel, and you take into account the share of the government in oil participation agreements and combining the unused capacity of the SOTE-OCP pipelines (which runs up to about 450,000 barrels), at the present time the government is losing approximately $800,000 Million of profits per year. This is an opportunity cost which could represent a huge net profit into the government's pocket, not to mention additional revenues of $400,000 Million in income tax per year.

Do you feel that this is a transition year for the OCP and shareholders? What is your next challenge?

As President of OCP, my main objective is to fill the line. We will also become the strongest promoter of investment in the oil sector, because we need the pipeline to be filled in order to generate revenues. This will involve active and aggressive promotion of investment opportunities in the oil field production of Ecuador.

We also have a key role in contributing to the highest standards in the way business is done in Ecuador. Cooperating with the Government, working with communities, promoting sustainable development and conservation projects, using state-of-the-art technology and strongly pursuing law enforcement.

What was the path that led you to become President of OCP?

I am a lawyer by profession, and set up my own law firm in 1993. It grew to become one of the top law firms in Ecuador, when I was invited to join OCP as General Counsel, in June 2002, until the Sponsors believed that I was the right person to lead the Company as of February 2003.