The military, led by General Guillermo Rodríguez Lara , seized control for two main reasons. First, they were anxious that the flighty populist, Asaad Bucaram , former mayor of Guayaquil, was going to be victorious in the upcoming elections, a figure they believed too irresponsible and dangerous to oversee a fragile democracy. More importantly, however, large oil reserves had been found in the Oriente, and they saw themselves as the most reliable custodians of this new-found national treasure. Texaco's explorations in 1967 had struck rich, locating high-quality oil fields near Lago Agrio, and by 1971 over twenty international companies swarmed to the Oriente, on the scent of a fortune.

 

The military junta was aggressively nationalist in stance, and determined that the state should get as much from the oil boom as possible. Contracts with the foreign companies were renegotiated on more favourable terms, a state-owned petroleum company was set up, and in 1973 Ecuador joined the Organization of Petroleum Exporting Countries (OPEC). Money flooded into the public sector, stimulating employment, industrialization, growth of the domestic economy and urbanization. The Oriente infrastructure was revolutionized, and in 1971, Texaco built a road to Lago Agrio, the first to leave the eastern Andean foothills. Ecuador was also anxious to populate the Oriente, lest Colombia or Peru should get ideas about the oil-rich lands, and colonists, especially military conscripts, were encouraged into the region in their thousands. The huge environmental impact of colonization and the oil industry's successes, however, is still being felt throughout the region.

The junta pushed its nationalist stance too far though, when it declared that the state's stake in Texaco operations should be upped to 51 percent, discouraging further foreign investment and prospecting. Oil production fell by a fifth, but this was offset for the time being by a sharp rise in global prices.

Yet even with the extraordinary increases in revenues and booming economy, the government managed to seriously overspend on its nationalization and industrialization schemes (there were also allegations of corruption), so racking up some impressive debts along the way. Trying to redress the balance, they slapped sixty percent duty on luxury imports, a move that badly upset the private sector and sparked a failed coup that claimed 22 lives. Rodríguez Lara's position was weakened enough for a second, bloodless coup in 1976, led by a triumvirate of military commanders, to be successful. They sought to return government to civilian rule, but on their own terms. It took almost three years for them to do so, as they tried to deny the now ardent anti-militarist Bucaram - whom they prohibited from running - and his centre-left coalition from winning.