Occidental Petroleum ( OXY - news - people ) and others reduced debt loads by doing precisely that--exchanging their debts for cash or equity.

FORBES: Catalytic Tax Changes

Barack Obama was educated at top-notch schools: Occidental College, Columbia University and Harvard Law School.

NPR: Obama's Evolution From Organizer To Politician

Virtually debt-free producers like Occidental dropped 50%.

FORBES: Out Of Treasuries And Boldly Into The Fire

But in May 2006 Ecuador seized the fields of Occidental Petroleum (nyse: OXY - news - people ), claiming that the company had violated its operating contract.

FORBES: Chavistas in Quito

During the stressful 1970s and early 1980s Chrysler, Westinghouse, Occidental Petroleum and others reduced debt loads by doing precisely that--exchanging their debts for cash or equity.

FORBES: Magazine Article

The only price-attractive U.S. major producers are Apache and Occidental Petroleum.

FORBES: Magazine Article

In the process, Apache will leapfrog Occidental Petroleum ( see recent Forbes story on Oxy) to become the fourth-biggest U.S. oil company (by production, but not market cap) after ExxonMobil, Chevron and ConocoPhillips.

FORBES: Apache Snags BP Assets For $7 Billion

Yet mitigating the risk of default is the fact that Ecuador's ability to service its debt has improved in recent months, as high energy prices, increased taxation of the oil sector and the state's take-over of Block 15 previously run by a US company, Occidental Petroleum (Oxy), are boosting the fiscal surplus and foreign reserves.

ECONOMIST: Ecuador's radical new president promises big changes