Hundreds of indigenous people gathered outside the Marriott Hotel in Quito on Nov. 28 at the VII Annual Meeting of Oil and Energy, where the Ecuadoran government announced the opening of the XI Round oil auction, offering 13 blocks covering nearly eight million acres of rainforest in the Amazonian provinces of Pastaza and Morona Santiago near the border with Peru. Led by the Confederation of Indigenous Nationalities of Ecuador (CONAIE) and the Confederation of Amazonian Indigenous Nationalities (CONFENIAE) and representing seven indigenous nationalities, the group blocked the entrance to the hotel, to be met by military and private security forces as well as police who used pepper spray. Several indigenous leaders succeeded in entering the meeting and publicly confronted Minister of Non-Renewable Energy Wilson Pastor. “CONFENIAE was never consulted about this,” said the organization’s Franco Viteri. “Our position on oil extraction is clear: We are absolutely opposed.”
According to Achuar leader Domingo Peas, the so-called “consultation” processon the oil auction did not include indigenous participation and was not in accordance with traditional decision-making practices nor carried out in native languages. “We say to the transnational corporations, there is no guarantee for your investments,” said Humberto Cholango, president of CONAIE. “Those who go forward will face indigenous resistance in our territories.”
For Ecuador—an OPEC-member whose oil output has hovered around 500,000 barrels per day in the past few years—the oil industry represents an important source of revenue. The government hopes to attract investments worth around $1 billion in oil exploration projects. David Martin, CEO of Gente Energy—formerly of Ivanhoe Energy, which has run into major trouble in Ecuador—proclaimed the small Andean country would be “the next Kuwait.”
But Kevin Koenig, Ecuador program coordinator at Amazon Watch, had a warning for the industry. “This is simply a bad investment,” said . “Ecuador is selling off its last remaining rainforests and indigenous lands to the highest bidder. These are some of the most controversial blocks in the Amazon, companies must realize they are purchasing a problem that will only get worse. If there is this much resistance at the outset of the round here today, imagine what will happen if a company shows up in a community with an oilrig.”
The contested oil blocks have a long legacy of controversy. Under President Lucio Gutiérrez, Ecuador attempted to offer up many of these same blocks only to find no bidders. Two blocks were previously held by ARCO, Burlington Resources, CGC and ConocoPhillips, but indigenous resistance kept company works out, forcing the government to declare force majeure and paralyzing the projects for nearly a decade. Ultimately, Ecuador had to compensate the companies for lost revenue and the companies endured major damage to their brands.
While exploration rights for 13 blocks were put up for auction at the Quito confab, the government put off a deciision on five more blocks in the area—including those within Sarayaku and Achuar ancestral territories. Companies will have six months to present their bids, and contracts should be signed before the end of September 2013. (Amazon Watch, Nov. 28)