December 6, 2008 / 12:52 PM / 10 years ago

Iran and Ecuador vow closer ties

TEHRAN (Reuters) - The presidents of Iran and Ecuador pledged an expansion of diplomatic and other relations on Saturday, the latest sign of closer ties between Tehran and leftist South American governments that have annoyed Washington.

Iran's President Mahmoud Ahmadinejad (R) hugs his Ecuadorean counterpart Rafael Correa in Tehran Desember 6, 2008. REUTERS/Stringer

Ecuador is seeking loans from friendly nations like Iran and Venezuela as plunging oil prices are hurting the Andean country’s revenues, but President Rafael Correa made no mention of this after talks with Iran’s Mahmoud Ahmadinejad in Tehran.

Correa, who arrived in the Iranian capital late on Friday for an official visit expected to end on Tuesday, said the two OPEC members would open embassies in each other’s capitals in January, Iran’s ISNA news agency reported.

Iran, at loggerheads with the United States over the Islamic Republic’s disputed nuclear programme, has sought to boost international support including in South America where it has also courted Bolivia and Venezuela.

“The Ecuadorian government is determined to expand and deepen ties with Iran,” Correa, a leftist former economy minister, said.

“We have had good expansion of ties so far and we are hopeful we will be able to deepen that,” ISNA quoted him as telling reporters.

Correa has threatened not to repay Ecuador’s sovereign bonds worth around $3.8 billion, saying they were acquired illegally by past administrations. A debt default could shut down credit lines to the government and local businesses, analysts say.

Iran is the world’s fourth-largest oil producer and is also facing declining export income after prices tumbled by around $100 a barrel from a July peak of $147.

The head of the National Iranian Oil Company was on Saturday quoted as saying it had earned $61 billion so far in the Iranian year that began in March, without giving a comparison. Ecuador is a much smaller crude producer.

Ahmadinejad, who often rails against the West, said after meeting Correa that Iran and Ecuador were determined to expand ties in all fields. He gave no details.

“We just had very good negotiations in various fields with the Ecuadorian president. We held talks in (the fields of) oil, agriculture, industry and trade,” Ahmadinejad said.

Iran and Ecuador signed an energy cooperation deal in September, including a plan to build a refinery and a petrochemical unit in the South American country.

U.S. officials have voiced concern about Iran’s ties with South American states such as Venezuela, particularly as Washington tries to isolate Tehran in the nuclear row.

The United States accuses Iran of seeking to build nuclear bombs, a charge Tehran denies, insisting it wants nuclear power plants so it can export more of its huge oil and gas resources.

Reporting by Hashem Kalantari; Writing by Fredrik Dahl; Editing by Charles Dick

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