ECUADOR: Fate of Untapped Oil Hangs in the Balance - of Trust Fund

•  quito
• Friday, July 15, 2011
• Inter Press Service

The novelty in Tuesday's announcement was that Pástor detailed an oil production plan, in the event that drilling goes ahead. He said 14 wells would be drilled, with an investment of 8.6 billion dollars at the extremely attractive internal rate of return of 99 percent.

The minister also gave the possible start date for production in the oilfields as the third quarter of 2012, and added that 'the fields are less than 100 km away from an oil pipeline that has spare capacity.' He was referring to the Heavy Crude Pipeline (OCP), built in Ecuador by private companies to transport oil from the Amazon jungle to the Pacific coast, and mainly owned by the Spanish firm Repsol.

Pástor's announcement at the opening session of the First Latin American and Caribbean Seminar on Oil and Gas, organised by the Ecuador-based Latin American Energy Organisation (OLADE), was the most detailed so far from a government spokesperson about the option to exploit the crude oil. The Under Secretariat of Hydrocarbons Policy has already been contacting potential interested parties since March, in case the drilling goes ahead.

The initiative for not extracting the oil was originally proposed 20 years ago by Fundación Natura, the largest environmental organisation in Ecuador, and has since been supported by a number of environmental and indigenous groups defending the Yasuní National Park and its buffer zone, where the oilfields are located.

The Yasuní is one of the world's most highly biodiverse regions, with more plant and animal species found in one hectare than in the whole of North America, according to scientific studies.

It is also home to the Tagaeri and Taromenane indigenous groups who are living in voluntary isolation from the outside world. The Yasuní, declared a national park in 1979 and a World Biosphere Reserve 10 years later, covers an area of 982,000 hectares of the Upper Napo river basin.

Leaving one of the country's largest oil reserves underground would reduce emissions of carbon dioxide, one of the main greenhouse gases responsible for global warming, by 407 million tonnes, environmentalists say.

The environmentalists' proposal was adopted by Correa when he took office in 2007, and he made it official Jun. 5, 2007 at the United Nations as a multifaceted project, combining protection of the environment and of indigenous communities with promotion of renewable energies, to which the funds would primarily be devoted.

© Inter Press Service (2011) — All Rights ReservedOriginal source: Inter Press Service

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