Shortly afterwards, Petroecuador reversed the decision, saying it would bypass the damage or use a private pipeline.
 
New high
 
Oil prices touched a new high above $103 on Friday after the Ecuador incident and a fire in a major European natural gas plant.
 
Petroecuador said the Transecuadoran pipeline was severed by a landslide that also took out 70 metres of a highway near Baeza. The statement did not specify whether there were any spills.
 
The 503km pipeline that runs from the city of Lago Agrio in the eastern Amazon to the western port of Balao crosses the Andes to transport some 357,000 barrels of crude a day.
 
Another pipeline unaffected by the landslide carried that year 148,800 bpd of heavier crude for private oil companies.
 
Enough reserves
 
A Petroecuador official said there are enough oil reserves in Balao to meet the country's demands while the pipeline is under repair.
 
"Exports were suspended and a force majeure was declared to avoid sanctions from our buyers, who already have been notified of the emergency," AFP quoted an unnamed Petroecuador official as saying.
 
Ecuador, the smallest producer of the Organisation of Petroleum Exporting Countries (Opec) and number five in South America, extracts some 511,000 barrels of oil per day, of which 67 per cent is exported. In 2007 it made $7.43bn in oil revenues.
 
Fifty-one per cent of Ecuador's crude oil extraction is owned by the government.
 
Foreign firms
 
The rest goes to Spain's Repsol-YPF, France's Perenco, Brazil's Petrobras and China's Andes Petroleum.
 
The foreign oil companies are currently renegotiating their contracts after Ecuador took measures that greatly reduced the extra profits brought by rising crude oil prices.
 
The rains that caused the landslide that damaged the Transecuadoran pipeline, also killed seven people the previous night.
 
This brought the toll to 23 since the downpours began in mid-January, Ecuador's civil defence office said in an e-mailed statement on Thursday.
 
Some 9,000 people have been forced to flee their homes and hundreds of thousands have seen their property damaged.