The Ecuadorian government stands to lose about $1.2 billion a year if the “yes” vote wins a referendum on suspending oil drilling in a natural park in the country’s eastern Amazon, Energy Minister Fernando Santos said Wednesday.
The Constitutional Court gave the green light on Tuesday to this consultation, demanded for ten years by environmentalists in order to maintain “indefinitely in the subsoil” the oil of the block Ishpingo, Tambococha and Tiputini (ITT), also known as block 43.
55,000 barrels per day
This oil block, located in the Amazonian park of Yasuni, currently produces about 55,000 barrels per day. “That’s about 20 million barrels a year” of production in the ITT, Santos said on a local media outlet. “At $60 (a barrel), we are talking about $1.2 billion (a year) less revenue in a country that has huge needs,” he said.
Oil is one of the main sources of funding for Ecuador’s dollarized economy, which produced an average of 469,000 barrels per day in January and February. After the approval of the Constitutional Court, the National Electoral Council must organize the referendum within the next two months, the result of which will be legally binding. There will be a campaign “for the defense of life, the defense of Yasuni,” promised for her part to the press the environmentalist Esperanza Martinez, a member of the group that initiated the request for consultation in 2013, before the beginning of the exploitation of the ITT block.
The government of socialist President Rafael Correa (2007-2017) advocated avoiding extraction in the block in exchange for $3.6 billion in international compensation, but his initiative failed and extraction began in 2016, after the same President Correa gave permission to exploit.
World Biosphere Reserve
The Yasuni Reserve, which covers nearly one million hectares, was declared a World Biosphere Reserve in 1989 by UNESCO and is home to nomadic indigenous peoples (including the Waorani), including two tribes who live in voluntary isolation. It is the largest of the continental protected areas in Ecuador, which has a total of 44 natural parks.
In addition to the ITT block, located in the province of Orellana and with estimated reserves of about 1 billion barrels, other oil fields are in production in the Yasuni reserve. The Court established that in case of a positive vote, it will be necessary to grant a period of one year for the execution of the order, during which there will be an orderly phasing out of all oil activities in the ITT. The State will no longer be able to establish new contractual relationships to continue operating the same block.
