Ecuador is building the 300 miles (500 km) pipeline that will link oil fields in Ecuador's Amazon to coastal ports, double the country's crude transport capacity to 850,000 barrels per day (bpd), and buoy the economy. Construction began in August last year and was suspended near Mindo in December due to rainy weather.

Local communities have been pressuring the management of the group of international oil companies building the pipeline, OCP Ecuador S.A., to pay about $10 million for development of projects, ranging from construction of roads and hospitals to providing running water.

"These obstacles have to do with bad management by the OCP in the area," Teran said. "In its environmental and community development plan the OCP had to follow some norms but in a way it has not been diligent in doing so," he added.

Villagers near Quito have seized truckloads of pipeline tubing, blocked roads, and protested in unison with environmentalists who opposed the construction.

"With all the money that it is being invested in the area, the pipeline's management could have turned the local population into big allies and minimize political manipulation, but they have not been successful in doing it," Teran added.

In March, protesters caused more than $7 million in spilled oil and damages to equipment demanding development funds from the government. The state agreed to improve electric services and help poor coffee farmers with the next crop.

Foreign environmentalists, mostly Europeans, have also joined the protests to stop the construction of the pipeline fearing it will destroy large swaths of Amazon jungle and a protected forest and bird habitat called Mindo, near Ecuador's capital Quito.

"There is no solution (that will satisfy) environmentalists. What they want is for the pipeline not to be constructed, and neither Ecuador nor Ecuadoreans can take that luxury," the minister said.

Crude oil is the main export and the second source of income for the Andean nation.

The $1.1 billion pipeline will double Ecuador's crude production capacity from 400,000 barrels per day in 2002, but just as important, the OCP will allow Ecuador to export its lighter, more valuable crude as it is easier to refine.

Currently, heavy and light crudes must be transported through the nation's only pipeline, SOTE, mixing the qualities of the grades, which result in cheaper crude.

To increase its revenues, the government is determined to build the pipeline fast, but is also set to build it under strict environmental regulations, the energy minister said.

"To evaluate the pipeline's path we brought organizations such as the Smithsonian, Holland's commission for the study of environmental impact, and experts from Calgary University. They determined the pipeline's path and we are monitoring it," Teran said.