Ecuador approves oil drilling in the Amazon

Some say it took millions of years, others say it took seven days, for the Amazon rainforest to be shaped. But it took just ten hours for Ecuador’s government-dominated assembly to authorise on Thursday “responsible” drilling in a pristine area of the jungle that is estimated to hold some 900m barrels of crude.

State-run oil company Petroamazonas will be in charge of developing two blocks that could produce some 225,000 barrels per day – a whopping addition to the 540,000 bpd that Opec’s smallest member currently extracts.

Although the Andean country is heavily dependent on oil exports, President Rafael Correa offered in 2007 to not develop the crude reserves that are in a protected part of the Amazon, the Yasuní National Park, if wealthy nations pay the country at least $3.6bn over a decade.

But in August, after receiving just paltry $13m for the initiative, the leftwing leader announced he was pulling the plug on the initiative. “The world has failed us,” he said at the time. He also downplayed the impact of oil extraction, saying it would just be limited to less than 1 per cent of the park’s surface.

With the area’s estimated reserves believed to be worth more than $18bn, Correa said he planned to use some of the oil proceeds to fight poverty. “As long as I’m president I will take advantage of the last gram, the last drop of natural resources to lift my country out of poverty as quickly as possible,” he said earlier this week.

It is still unclear when drilling would start. However, the approved measure stipulates certain conditions to lessen the impact on the environment as well as on indigenous peoples – such as an immediate cease of oil workers activity if they spot members of uncontacted tribes.

Nonetheless, environmentalists and indigenous groups have rejected the idea of drilling in the Yasuní, and local media reports that some 600,000 people have signed a pledge calling for a referendum on the issue.

“If all of us Ecuadoreans agree on exploiting [the Yasuní for oil] we can then exploit, if not we won’t agree,” Alicia Cahuilla, an indigenous woman from the Waorani peoples, told lawmakers. “We are from where the resource, the oil, comes from in the Amazon, and we have been the most affected by contamination… [and] we have never benefited [from oil extraction] … [now] if everybody gets benefits then we would agree.”

Related Reading:
Ecuador admits defeat in plan to keep oil in the ground for a fee, FT
Ecuador punts its oil bidding round but China may be only taker, beyondbrics
Chevron’s Ecuador lawsuit: moving Chevron’s way?, beyondbrics