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Ecuador pursued China oil deal while pledging to protect Yasuni, papers show

 
Protest Against Oil Exploration in Yasuni in Equador

A demonstrator holds a sign that reads in Spanish ‘Ecuador doesn’t love life’ during a protest outside the government palace in Ecuador, August 2013 at plans to abandon the initiative where rich countries would pay Ecuador not to drill for oil in the pristine Yasuni rainforest. Photograph: Dolores Ochoa/AP

 

Powered by Guardian.co.ukThis article titled “Ecuador pursued China oil deal while pledging to protect Yasuni, papers show” was written by David Hill, for theguardian.com on Wednesday 19th February 2014 15.57 UTC

The Ecuadorian government was negotiating a secret $1bn deal with a Chinese bank to drill for oil under the Yasuni national park in the Amazon while pursuing a high-profile scheme to keep the oil under the ground in return for international donations, according to a government document seen by the Guardian.

The proposed behind-the-scenes deal, which traded drilling access in exchange for Chinese lending for Ecuadorian government projects, will dismay green and human rights groups who had praised Ecuador for its pioneering Yasuni-ITT Initiative to protect the forest. Yasuni is one of the most biodiverse places in the world and home to indigenous peoples – some of whom are living in what Ecuador’s constitution calls “voluntary isolation”.

The initiative – which was abandoned by Ecuador’s government last year – is seen as a way to protect the Amazon, biodiversity and indigenous peoples’ territories, as well as combat climate change, break Ecuador’s dependency on oil and avoid causing the kind of social and environmental problems already caused by oil operations in the Ecuadorian rainforest.

“This raises serious doubts about whether the government was truly committed to keeping ITT oil in the ground,” said Atossa Soltani, from NGO Amazon Watch and a former ambassador for the initiative. “While we were promoting the Yasuni initiative to donors, the government was offering ITT’s crude to China.”

The document, titled China Development Bank Credit Proposal, bears the name of Ecuador’s Ministry of Economic Policy Co-ordination on every page. Under the heading Results of the 1st Negotiating Round: Preliminary agreements, which took place between 13-23 May 2009, it states: “Last minute clause: The Ecuadorian party has said it will do all it can to help PetroChina and Andes Petroleum explore ITT and Block 31.”

ITT refers to the Ishpingo, Tambococha and Tiputini oil fields – the first two under Yasuni, the last partially – and Block 31 is an oil concession immediately to the ITT’s west. PetroChina is a listed company controlled by China National Petroleum Corporation (CNPC), owned by the Chinese state, and Andes Petroleum is a joint venture between CNPC and another state-run Chinese firm.

Ecuador Oil Exploration Map

The objective of the Chinese negotiators was in part to “guarantee the supply of crude oil for PetroChina in the medium term”, while the Ecuadorian government wanted to “obtain access to a favourable line of credit to finance priority projects,” the document says.

The proposed deal was that the China Development Bank, would lend “no less than US$1bn in the first phase” to “Ecuador’s Ministry of Finance or an entity designated by Ecuador’s government”.

But while these negotiations were taking place, Ecuador was appealing to potential donors to support the Yasuni-ITT Initiative – a scheme that emerged from civil society and was adopted by president Rafael Correa’s government in 2007, with a trust set up in 2008 to collect donations.

The details have changed over time, but the fundamental concept is to forgo exploiting the millions of barrels of oil in the ITT fields – estimated to be 20% of Ecuador’s total oil deposits – in return for financial compensation.

 

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