"With relation to the deadline of today or tomorrow to execute a second captive, I have information that yesterday negotiations were restarted," said Vice Adm. Miguel Saona, head of Ecuador's military Joint Chiefs of Staff. "The criminal group said it would not execute anyone else and I understand they have reached some economic arrangement."
He said he did not know details of the ransom deal.
The body of kidnap victim Ronald Sander, 54, of Sunrise Beach, Mo., was found Jan. 31 shot five times in the back and covered with a sheet that said he had been killed because his employers refused to pay ransom, authorities said.
Unconfirmed media reports here had said that the kidnappers warned they would kill another of the hostages if ransom was not paid by Feb. 15.
"The information that we have about this is not very broad because all negotiations are being conducted between the criminal group and the embassies or companies that employee the captives,"
Officials at the U.S. Embassy in Quito were not immediately available for comment.
Sources close to the investigation said the kidnappers had been refusing to budge from an initial demand of $80 million.
Sander, a technician with Tulsa, Okla.-based Helmerich & Payne Inc., was seized in October in a jungle region that has grown increasingly lawless in recent years. Nine others were taken along with him from oil camps in the El Coca region, some 150 miles east of Quito.
His body was covered with a white sheet scrawled with the words in Spanish: "I am a gringo. For non-payment of ransom. HP company."
The other Americans have been identified as David Bradley, of Casper, Wyo., an oil field platform foreman for Helmerich & Payne; and Arnold Alford, Steve Derry and Jason Weber, all employees of the Oregon-based Erickson Air-Crane Co., and residents of Gold Hill, Ore.
Helmerich & Payne issued a news release saying company officials had "greater optimism" regarding the safe return of the remaining hostages, based on developments.
"Our first and only concern is the safe return of all hostages," the statement said. "From the beginning, our experts have advised that it is critically important to maintain the confidentiality of this process."
"We will continue our efforts to bring David and the other hostages home safely and as quickly as possible."
Also among the kidnap victims are a Chilean, an Argentine and a New Zealander. Two others kidnapped, both French men, escaped shortly after they were seized.
Authorities believe the kidnappers are members of the same criminal gang that held seven Canadians and an American for ransom for 100 days in late 1999. Alberta-based United Pipeline Systems has never confirmed reports that it paid $3.5 million for the release of its employees.
"We have received information in bits and pieces from the negotiators, but the information that we have at hand makes us think that it is a criminal group with approximately 25 people,"
Oil industry and military sources have said the kidnappers were believed responsible for deadly dynamite attacks in December against Ecuador's main oil pipeline.
A top oil company executive, speaking on condition of anonymity, said the blasts began after the kidnappers rejected a counteroffer of $500,000. The first explosion, on Dec. 9, destroyed a section of pipeline in the jungle 80 miles northeast of Quito.
The executive said negotiators then made an offer of $800,000, which the kidnappers also turned down. Another round of blasts on Dec. 12 followed, one of which killed eight passengers in a passing bus.