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Ecuador eyes ITT deposits to fight poverty – BNamericas

Under President Rafael Correa, Ecuador has defaulted on its international debt, expropriated assets and changed oil contracts to service agreements, resulting in a flight of capital and the departure of a number of oil firms including Brazil’s Petrobras and US-based Noble Energy.
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Opponents of President Rafael Correa’s policies, many of them from indigenous groups, protested against government policies on Thursday, including one that would permit the populist leader to run for office indefinitely. Discontent has grown as a slump in oil prices has weakened the pace of Ecuador’s robust economic growth of recent years. Thursday’s protests, among the largest in a series of recent demonstrations and the first national strike, comes a day after ratings firm Standard & Poor’s lowered its sovereign credit ratings on Ecuador by a notch. <a href="https://theamazonpost.com/ecuador-native-groups-opponents-strike-against-president-correa-wall-street-journal/">Read more>></a>

Ecuador’s government has turned its attention to resources in the ITT-Yasuní national park, a move causing controversy as Quito strives to boost its oil revenues to fight poverty, according to the latest BNamericas Intelligence Series report.

Ecuador is the smallest OPEC member nation with output stagnated at around 500,000b/d since 2007, despite oil contributing 76% to the country’s total energy consumption in 2012.

Under President Rafael Correa, Ecuador has defaulted on its international debt, expropriated assets and changed oil contracts to service agreements, resulting in a flight of capital and the departure of a number of oil firms including Brazil’s Petrobras and US-based Noble Energy.

Now the government is eyeing its untapped oil resources in the ITT-Yasuní national park in the country’s Amazon region for exploration and production, a move that will cause controversy, according to the report.

In a speech to the UN General Assembly in 2007, Correa said he would place an indefinite moratorium on drilling in the northeastern half of Yasuní national park, a 350-square mile area dubbed ITT after the Ishpingo, Tambococha and Tiputini oilfields it contains, in return for US$3.6bn in donations during 13 years.

The pristine region has been called the most ecologically diverse area on earth, despite comprising just 0.15% of the entire Amazon.

But with the monies not forthcoming, beginning exploration and production in Yasuní would bring the much-needed revenue, Correa argues.

“The choice was: Yasuni 100% intact and have no money to fight poverty or 99% of Yasuni intact – at least 99% – and have about US$18bn,” he said in 2013. In May, environment minister Lorena Tapia said an environmental license had been issued to state E&P operator Petroamazonas, clearing the way to start drilling.

Correa claims that new, cutting-edge techniques will minimize the impact of drilling. Oil production has occurred for decades in other parts of the park, including an adjacent block run by PetroChina, according to the report.

“I do believe there is no turning back on the extraction of oil from the ITT block at this point,” it quotes Kelly Swing, a professor of environmental science at the Universidad San Francisco de Quito, as saying.

With Ecuador keen to use oil revenues to fight poverty and finance public spending, the drilling of Yasuní appears imminent.

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