Occidental share prices fell by 2.35 percent on Tuesday as company executives held talks with Ecuadorean energy officials, who were escorted by police into the company's Quito headquarters.

President Alfredo Palacio has been under pressure from Indian groups in the oil rich Amazon to expel Occidental, who accuse the firm of exploiting natural resources with no benefit for Ecuadoreans. Occidental had also become a lightening rod for criticism of U.S. "imperialism."

The surprise contract cancellation came a little more than two weeks after leftist President Evo Morales of Bolivia, the country's first indigenous president nationalized the industry and ordered the military to occupy natural gas fields.

Bolivia's move sparked Wall Street fears that leftist Venezuelan President Hugo Chavez, a self-styled revolutionary famous for his anti-U.S. rhetoric, was pushing his neighbors in a campaign to tighten state control over natural resources.

Ecuador's top trade negotiator said the oil field takeover had prevented free trade talks from the United States from going forward.

"We are disappointed by this decision and seeking for clarification with the government of Ecuador," said Kurtis Cooper, spokesperson for State Department when asked about the Occidental case.

Analysts warned against pointing the finger at Chavez as the culprit in Ecuador and said moves against foreign producers were often due to high energy prices worldwide.

"Each country has its own reasons to do what it is doing," said Rob Cordray, director of Houston consulting group PSC Energy. "This is something that is happening everywhere, not only in Latin America. Oil companies are profiting a lot and the governments want to get a bigger part of it."

Ecuador on Tuesday ruled out any nationalization of the oil industry. Officials say the country will receive an extra $100 million per year in oil revenues due to the Occidental contract cancellation.

Energy Minister Ivan Rodriguez said Ecuador is studying the possibility of a joint venture with other Latin American state oil companies to operate Occidental's oil fields.

Occidental is Ecuador's largest investor and extracts 100,000 barrels of oil per day, about 20 percent of Ecuador's total production.

ANDEAN TREND?

Locked in a growing dispute with the United States, Chavez has promoted his brand of socialism as an alternative to U.S. free-market policies. He has led a campaign to secure more government control over energy revenues and has actively backed Bolivia's Morales in his nationalization move.

Washington has branded the former soldier a negative influence in the region, accusing him of using his oil wealth to undermine democracy. Chavez dismisses the charges as "imperialist" propaganda.

Five months ahead of the next presidential election, Ecuador's government has faced increasing pressure indigenous groups to act over Occidental.

"Ecuadorean politicians believe that Occidental did something illegal," said Leo Goldstein sovereign analyst at Stamford, Connecticut-based Finisterre Capital.

"Many of them wanted to negotiate a settlement but there were social pressures, increased by what happened in Bolivia, that added to the pressure to cancel the contract," he added.

Ecuador is also seeking more benefits from high oil prices by introducing a law that forces companies to hand over a bigger share of windfall oil profits to the state. Experts say the law may crimp much-needed investment in the energy sector.

"One can expect growing nationalism in the energy sector in Latin America, but this is not a start of a wave of expropriations," said Cynthia Arnson, director of the Latin American Program at the Woodrow Wilson International Center for Scholars in Washington.

"You may see a push in Peru, for example, to revise the terms of the bargain with foreign mining companies, in which the government tries to negotiate a greater percent of profits," she said.

"This study shows that it is very plausible that exposure to Exxon Valdez oil is having a material impact on many shore-dwelling animals and is contributing to their slow recovery in some parts of Prince William Sound," Short said in a statement.

The study is to be published in the June 15 edition of Environmental Science & Technology, the journal of the American Chemical Society.

Exxon Mobil Corp. spokesman Mark Boudreaux said that more than 350 studies done by independent academics have not found significant, lingering impact on species as a result of the spill.

"We believe that the sound has recovered, is healthy and is thriving," he said.

Short and his colleagues focused their research on Knight Island about 40 miles southwest of the spill site and squarely in the path of the heavy ooze that flowed from the damaged oil tanker.

They found Exxon Valdez oil buried in sand and silt that only becomes dry during the lowest tides and is prime feeding ground for sea otters, ducks and other wildlife.

The Exxon Valdez ran aground March 24, 1989, spilling 11 million gallons and soiling more than 1,200 miles of rocky beach. The spill was the largest in U.S. history.

Exxon estimated it paid $3 billion in cleanup costs, government settlements, fines and compensation.

In a 1991 civil settlement, the company agreed to pay $900 million over a 10-year period ending in 2001. However, a "reopener" provision created a window in which the state and federal governments could claim up to an additional $100 million.

Dozens of people have spoken at emotional hearings this year, urging officials to file a claim for additional damages before the June 1 deadline to apply.

"We find the timing interesting, that the study has been released for peer review two weeks before the deadline for the decision to notify Exxon Mobil of an intention to request a reopener of the settlement," Boudreaux said.

RAF Fairford in Gloucester also has facilities for B2s but this has been ruled out because of the UK's opposition to military action against Tehran.

The main plan calls for a rolling, five-day bombing campaign against 400 key targets in Iran, including 24 nuclear-related sites, 14 military airfields and radar installations, and Revolutionary Guard headquarters.

At least 75 targets in underground complexes would be attacked with waves of bunker-buster bombs.

Iranian radar networks and air defence bases would be struck by submarine-launched Tomahawk cruise missiles and then kept out of action by carrier aircraft flying from warships in the Indian Ocean and Persian Gulf.

The alternative to an all-out campaign is a demonstration strike against one or two high-profile targets such as the Natanz uranium enrichment facility or the hexafluoride gas plant at Isfahan.

UK sources say contingency plans have also been drawn up to cope with the inevitable backlash against the Basra garrison in neighbouring Iraq.

Middleeastforex.com reported May 13 that Ahmadinejad announced the change Friday during a visit to Baku, Azerbaijan.

Many political observers see the decision as an attempt to pressure Washington, which is attempting to line up other U.N. Security Council members to act against Iran for its nuclear policies.

Iran has also proposed establishing a euro-based Iranian oil bourse to compete with NYMEX and the IPE. The proposal was first put forward in the beginning of the Third Development Plan (2000-2005), and began to receive serious attention in 2005.

Some observers speculate that the Iranian switch to euros could negatively affect the dollar, as many central banks from oil importing nations could choose to stock up their currency reserves with euros rather than dollars.