• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 7 hours EU has already lost the Trump vs. EU Trade War
  • 1 hour Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 27 mins Science: Only correct if it fits the popular narrative
  • 4 hours ''Err ... but Trump ...?'' *sniff
  • 54 mins China's Renewables Boom Hits the Wall
  • 14 mins What are the odds of 4 U.S. politicians all having children working for Ukraine Gas Companies?
  • 6 hours Tesla Launches Faster Third Generation Supercharger
  • 15 hours Who writes this stuff? "Crude Prices Swing Between Gains, Losses"
  • 7 hours Passerby doused with flammable liquid and set on fire by peaceful protesters
  • 5 hours Crazy Stories From Round The World
  • 1 day Haaretz article series _ Saudi Arabia: A Kingdom in Turmoil | Part 1 - Oil Empire

Breaking News:

Russia Plans To Boost Crude Oil Exports

Alt Text

U.S. Shale Will Soon Produce More Oil Than All Of Russia

Despite growing pessimism in the…

Alt Text

OPEC Is Desperate For A Trade War Resolution

OPEC’s Secretary General is desperate…

Southern Pulse

Southern Pulse

More Info

Premium Content

Ecuador Opens Oil Blocks in Amazon Rainforest

Rafael Correa, the extremely popular president of Ecuador, announced the decision to open additional blocks (Ishpingo, Tambococha, Tiputini) of the Yasuni National Park on 16 August 2013.

These blocks—Ishpingo, Tambococha and Tiputini—are extraordinarily rich in biodiversity and home to several indigenous tribes, but until now they have been protected from development by Correa’s own Yasuni ITT initiative.

The Yasuni ITT initiative pledged to protect that environment if Ecuador received donations sufficient to forgo the money they would otherwise receive from oil royalties and exports—a figure Ecuador put at $3.6 billion.

After nearly a decade of trying to drum up support for the innovative initiative from rich donors, Correa determined that Ecuador could not afford to keep up the program, called the Yasuni-ITT Initiative Trust.

They allegedly got $330 million in pledges and received just $13 million in donations, a tiny fraction of the $18 billion they might be able to earn by extracting the roughly 850 million barrels of crude below the rainforest floor.

Related article: Tullow to Start Pumping in Kenya Next Year

Petroamazonas, the state oil company, will be the main beneficiary of the reversal, but Correa appears open to working with outside companies, so long as they operate in the most environmentally-conscious way possible.

Any company who drills in Yasuni must have a solid plan to adhere to environmental audits by the government of Ecuador, which despite permitting the development of Yasuni, remains vocal about its commitment to protecting its natural resources.

Although activists and NGOs are working furiously to block the new Yasuni concessions, Correa has sufficient support in Congress to pass the bill quickly. It is a sign that Correa is willing to play ball with the oil industry--a group of investors with whom he has complicated relationships.

Ecuador is involved in a long-standing legal dispute with Chevron, which acquired Texaco in 2001. Chevron became the new defendant in a lawsuit dating back to 1993, alleging that Texaco caused massive environmental damage in its operations going back to the 1970s. A court in Ecuador found in favor of the plaintiffs, awarding them $19 billion--a judgment Chevron continues to fight.

For its part, Ecuador withdrew from the ICSID tribunal in 2009 after a series of rulings that his government’s policies violated contracts the government had with foreign oil companies including Perenco and Occidental.

Related article: Chevron Regains Foothold in Argentina’s Oil Sector

A number of other suits are now pending in other forums, including claims by Encana and Andes Petroleum.

Several days after giving up on the Yasuni-ITT initiative, Correa tweeted another unusual idea on how Ecuador could be more carbon conscious: he suggested the elimination of news in print, saying that an all-digital news corp would help prevent deforestation and global warming.

In addition, Correa says the oil revenues will be used, in part, to build a renewable energy grid in Ecuador.

Small to mid-sized companies should be looking at Ecuador for exploration and development opportunities in both the oil and renewable energy sectors.

By Southern Pulse for Oilprice.com




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play