Alberto Araujo, Argus Media

QUITO
EnergiesNet.com 08 24 2023

Ecuadorian communities may contest the results of the referendum that decided to stop oil activities in the Ishpingo, Tampococha and Tipuniti fields (ITT), energy minister Fernando Santos said.

With 98pc of all votes counted, the option to halt activities obtained over a 59pc majority. But the “no option” won in ITT’s Orellana province with 58pc and in the Sucumbios province with 52pc, according to the electoral authority (CNE). More than 90pc of Ecuador’s oil exploration and production activities take place in the two provinces.

According to Santos, article 57 of the constitution guarantees that only the inhabitants of the communities where the crude — or any other natural resource such as gold, silver or copper — is located can decide whether exploitation activities start or end.

The constitution also guarantees the right of the communities near block 43 — where the ITT is located — to keep receiving the resources from oil extraction, he said.

Therefore, Orellana’s indigenous and local governments can contest the referendum’s results before the constitutional court and eventually void them, Santos said.

Independently of the possible appeal, Santos said that state-owned Petroecuador — ITT’s operator — and the ministries of environment and energy are preparing a plan to stop crude activities in the fields and remove all oil facilities.

The plans will take at least three months, so the next governing administration — which takes office in December — will be responsible for applying it. Candidates Luisa Gonzales and Daniel Noboa are headed for a runoff election in October. Meanwhile, ITT will keep operating normally and extracting around 58,000 b/d.

Petroecuador has one year to stop crude activities in ITT. CNE expects to announce the official results of the election next week.

But it is impossible to remove all oil facilities and restore block 43’s flora and fauna in one year, Santos said, adding that it will cost the country around $500mn.

Environmentalist group Yasunidos said it will be “vigilant” in ensuring that the referendum’s results are fulfilled and rejected the legal interpretation of the energy ministry.

Petroecuador and the central bank estimate that Ecuador will lose $14bn-16bn in oil revenues through 2043 without ITT’s production.

ITT produced 53,035 b/d from January-July, according to Petroecuador, a 5pc increase from the same period in 2022.

argusmedia.com 08 23 2023