Ecuador would no longer receive around $13.8bn in revenues for the next 20 years if the country votes to end oil production in a protected Amazonian park, the head of state-owned PetroEcuador said.
This is because PetroEcuador plans to produce around 282mn barrels in the area from 2023-2043, chief executive Ramon Correa said. The fields produced an average of 50,615 b/d from January-April 2023, up by 2.5pc compared with the same period in 2022.
But voters on 20 August will not only elect a new president and congress in the wake of a presidential impeachment dispute but also decide the fate of oil production in the Ishpingo, Tambococha and Tiputini (ITT) fields in block 43, in the Yasuni natural reserve. Ecuador's constitutional court approved the referendum earlier this month, and a "yes" vote would give PetroEcuador one year to close all 255 wells and related facilities.
The start of production there in July 2016 came after years of debate over environmental and social impacts and a failed attempt for the international community to pay Ecuador to keep the crude in the ground.
Now that production did start, Correa said that in addition to the estimated $13.8bn loss of crude sales revenues, removal of infrastructure and restoration of the area will cost another $500mn. About 1,000 workers — 80pc of which are members of the nearby Waorani and Kichwa communities — will lose their jobs. And the company will have to pay another $251mn in social compensation and will lose around $1.9bn in investments already made. Total lost revenue and costs could reach $16.5bn in 20 years, Correa said in presenting PetroEcuador's 2022 report.
Leaders from the nearby Waorani and Kichwa communities said at the same event that they do not want to lose their jobs or other payments related to oil activities.
Pay to stay
Energy minister Fernando Santos said that if the option to stop oil activities wins the vote, the government could reconsider the initiative to conserve the ITT's crude reserves under the ground.
The idea was launched by former president Rafael Correa in 2007 when he asked the international community for $3.6bn in exchange for not producing the oil. But the initiative was discarded in 2013 because the country collected only $13mn. Potential donors had expressed doubts about assurances and transparency on how they money would be used.
