Latin America Advisor
Energy Advisor
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How Will Ecuador’s Referedums Affect Oil Production?
Ecuadoreans will vote in two referendums on Sunday over whether oil and mining projects in key regions of the country can continue.The 43-ITT block in the Yasuní nature reserve is pictured // File Photo: Ecuadorean Government.
Ecuadoreans will vote in two referendums on Sunday over whether oil and mining projects in key regions of the country can continue. The South American country will decide on whether to close the 43-ITT block in the Yasuní nature reserve in the Amazon, and end mining in the Choco Andino forest. Environmental activists say the bans are needed to protect nature, mitigate climate change and safeguard Indigenous communities, but oil and mining guilds say their industries are important to boost the country’s cash-strapped economy. How significant are the referendums this month? What effect would the bans have on Ecuador’s economy, and how important are they to protect local communities and the environment? How will they influence the country’s economic model for the future?
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Jose L. Valera, partner at Mayer Brown LLP: “Ecuadoreans will also vote for a new president on Sunday, and I would expect that the results of these two referendums will be linked to the results of the presidential vote. It was Rafael Correa who fought in 2013 for a law to authorize oil operations in the area. At the time, he dared opponents to stop him through a referendum. Now here we are. More than 750,000 signatures were obtained to bring this measure to the ballot. The economic arguments to reject the proposed ban are that the 43-ITT block currently produces about 57,000 barrels of oil per day (11 percent of the country’s total) and represents annual fiscal revenues of $1.2 billion. It is said to create 50,000 direct and indirect jobs, including many among the communities in the area. No oil spills have occurred, although…”
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A sister publication of the Inter-American Dialogue’s daily Latin America Advisor, the weekly Energy Advisor captures fresh analysis from business leaders and government officials on the most important developments in oil and gas, biofuels, the power sector, renewables, new technologies, and the policy debates shaping the future of energy in the Western Hemisphere and beyond. To subscribe or for more information, contact Gene Kuleta, editor of the Advisor, at gkuleta@thedialogue.org.
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