Fellow Investors,

this proposed Ecuadorian oil windfall tax is not written in stone by any means. If it was, then the government would not be sitting down to negotiate new terms with the oil companies because there would not be anything to negotiate.

In the West people are used to seeing a price and paying it. In many parts of the world however haggling is an everyday occurance for even the most basic of things, it is part of there culture. Westerners are looked on as fools for in most cases accepting the first offered price.  

The oil industry in Ecuador has not been a boon to the average Ecuadorian who is now poorer than when oil was first discovered in the region. The profits from the oil went somewhere but it certainly was not to the average Equadorian. Ever since oil was discovered in Ecuador it has been a confrontational relationship between the Governments and the oil companies. The oil companies have won in one form or other more often then not, which has over the decades led to bitterness.

Perhaps this bitterness is the reason behind the proposed new tax or more likely it is nothing more than a negotiation tactic in my opinion. You ask for something outrageous ( as I agree with Rich9 a 99% windfall tax is ) and eventually settle on what you really what. It is all part of the bargaining process. Fortunately for us, mining is a new industry with no past baggage, both ARU and Canada are respected by Equador by all accounts, this hopefully will lead to a mutually beneficial mining policy with little associated posturing.

The mining industry is totally different from the oil industry and a windfall tax is not a system of taxation that can be applied to the mining industry with success. Once again I agree with Rich9 that it would be total stupidity and I would be out of ARU faster than you can say Jack Rabbit if I had any real knowledge that one of any significance was going to be applied. Unfortunately by the time us retails found out ARU would probably already have plummeted and therefore there would be no point in selling hahahahaha.

Those people who have the real information on this front, management, funds and of course our manipulators, who have not sold and are actively increasing there positions, probably already have a good idea of what the proposed mining taxes are going to be. Since they are not selling and even buying, I am going to hold also.

Perhaps this latest news release will shed some light on the situation, not all is as the paid fear mongers on the S.H. ARU site would have you believe.

Regards,

F.F.

Oil Firm Eyes $6 Billion Investment in Ecuador
	Efe      Wednesday, November 07, 2007

Canada's Ivanhoe Energy wants to invest $6 billion in oil production from the Pungarayacu field in Ecuador's Amazon region, the Quito daily El Hoy reported. The newspaper said Ivanhoe had already presented a proposal to President Rafael Correa, who named a commission that will travel to California to see Ivanhoe's vaunted environment-friendly technology in action. Related Products Surface Production Operations, Volume 2, 2nd Ed. Improved Recovery The commission's members include Economic and Productive Policy Coordination Minister Mauricio Davalos and Industry Minister Raul Sagasti, as well as the head of state-owned Petroecuador, Carlos Pareja, among others. The date of the commission's trip has not been released. Ivanhoe Energy, according to the newspaper, proposes producing oil from Pungarayacu, which has reserves of some 4.5 billion barrels of extra-heavy crude, using a steam-injection method that the firm claims reduces environmental damage. The Canadian energy company is willing to sign a "specific services" contract, hire Ecuadorian workers and work with domestic companies, train personnel and improve crude transportation, El Hoy said. Ivanhoe has proprietary technology that can be used to improve reserves of oil and gas by upgrading heavy oil to light oil, according to the company's Web site. Energy Ministry officials told the newspaper that Ivanhoe Energy also presented its proposal to Petroecuador, but the state-owned company says it has no knowledge of the offer. Oil is Ecuador's main export product and revenues from its sale finance about 35 percent of government spending. The Andean nation produces some 530,000 barrels per day of crude. Copyright (C) 2007. Agencia EFE S.