Recent developments in
the Oriente of Ecuador


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Leasing of new oil concessions

Oil corporations acquire prospecting and drilling rights for oil in a leasing system of territorial concessions known as “blocks,” which average nearly 500,000 acres. The government periodically auctions blocks to the highest bidders, who then control drilling rights for a specified amount of time. In total there are 17 blocks available in Ecuador’s Oriente, with all but four located in the northern half of the region.

In 2002, to accommodate plans of doubling Ecuador’s oil exports, the ninth round of block leasing occurred simultaneously with the construction of the Oleoducto de Crudo Pesado (OCP) pipeline. These new leases included oil reserves in four blocks in the Pastaza province of the southern Oriente, an area of undisturbed rainforest that encompasses protected natural reserves such as Yasuni National Park. Many indigenous peoples reside in these pristine areas, including the Tagaere – the last known uncontacted community in the Oriente.

The OCP pipeline

In June of 2001, the government of Ecuador approved the construction of the OCP pipeline. This is the nation’s second heavy-crude pipeline, running next to the SOTE pipeline built by Texaco in the early 1970s. The $1.1 billion OCP was designed to double the nation’s oil production capacity.

According to Amazon Watch, the project has sparked a second oil boom in the Oriente. Many of the oil reserves destined to flow through the OCP likely lie beneath rainforests in undisturbed, protected areas such as Yasuni National Park, and the Limoncocha, Panacocha and the Cuyabeno wildlife reserves. In total the pipeline passes through seven national parks and protected preserves, threatening indigenous groups and communities reliant upon a thriving eco-tourism industry. Although the Constitution of Ecuador stipulates indigenous communities must be consulted over projects affecting the environment of their lands, the OCP pipeline was approved without any opportunity for affected communities to voice their concerns. Repeated protests denouncing the exclusion of indigenous input met with no response.

According to Leslie Jermyn, writing for Canadian Business and Current Affairs, opponents say that the OCP Ltd. Consortium, which won the bid to build the pipeline, chose a controversial route through protected preserves to avoid construction of a pumping station to carry crude over the mountains. OCP Ltd. argues that it followed the World Bank’s environmental standards. However, Dr. Robert Goodland, who wrote many of the social and environmental guidelines for the World Bank, criticized the OCP consortium’s impact study. Goodland said it did not adhere to World Bank standards and was negligent in its assessment of the impact to the environment, natural habitats, involuntary resettlement and indigenous peoples.

Compounding the controversy surrounding the OCP project, Pablo Terán, Ecuador’s Minister of Energy and Mines at the time, faced congressional impeachment over his private interests and involvement in choosing the OCP Consortium for the project. Ultimately, the final cost of $1.1 billion more than doubled the consortium's bid of $500 million.

Much of the pipeline’s route passes over highly unstable areas subject to mudslides and prone to earthquakes, including more than 60 fault zones, as well as within close distance of six active volcanoes. As of 2001 the older SOTE pipeline, which also runs through geologically unstable areas, had suffered 14 major ruptures in the previous three years. Mudslides burst the pipeline in 2001, threatening the water supply of Quito, the nation’s capital.

Resistance in the southern Oriente

Blocks 23 and Block 24, drilling concessions in pristine rainforests of the southern Oriente, are the ancestral homes of the the Shuar, Achuar, Kichwa, and Zápara nations. Legally recognized leaders of these indigenous nations have declared opposition to any oil development on their lands.

However, Burlington Resources, a Houston-based corporation, and its partners, Compania General de Combustibles of Argentina and Perenco of the UK, have declared they will proceed with oil production in the blocks. Legal experts for the indigenous groups have declared the companies would clearly violate national and international law by doing so.

According to Amazon Watch, Burlington officials have attempted to buy off individuals of the communities and bypass legally recognized channels of community representation. This violates an injunction handed down by a provincial judge prohibiting contact with non-authorized members of indigenous nations.

In the forests of the Sarayacu territory – the location of Block 23 – the Kichwa have vehemently resisted development by CGC. According to Kintto Lucas of the Inter Press Service, their strategies have included building human chains of men, women, children and elders to block oil workers. Kichwa leaders accuse CGC of sending in armed guards to force submission to the construction of oil camps, despite legal opposition to development.

In early October of 2003, Kenny Bruno reported that the Ecuadorian government announced it would send soldiers to Sarayacu to enable CGC to conduct operations. Carlos Arboleda, Minister of Energy and Mines, stated that the Kichwa have acted “illegally” and were “fomenting chaos” with the backing of NGOs. He and oil industry officials stated that the area is lacking in authority and is in need of a police presence.

Hilda Santi, the vice-president of the Sarayacu community, responded that "the oil company tries to slander us as terrorists to draw attention away from the abuses they commit against our rights. We have merely defended our territory against the aggression of the CGC and ChevronTexaco oil companies according to our customary rights, the Ecuadorian constitution and international conventions."

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© 2003 Matt Levitch