The possible departure of ITT would also have consequences for the work of OCP

A possible exit from Block 43 ITT – which generated $1.528 million gross in 2022 alone – would also affect the Heavy Crude Pipeline (OCP), which is currently privately owned and transports this crude oil to Balao. This was confirmed by Petroecuador’s director of exploration and production, Francisco Paz, commenting on the series of problems that the cessation of crude oil production would represent for Ecuador’s oil industry.

According to Paz, currently OCP is already operating with low crude oil levels: it is designed for 400,000 barrels and currently only transports 150,000 barrels, so if it were to decrease by 50,000 barrels or 55,000 barrels, which is ITT production, the operation would stop. It would be uphill.

In any case, it is known that OCP is also working on the transportation of crude oil from Colombia and that it is conducting negotiations for the transportation of crude oil from Peru.

The impact of income on the treasury was explained by Petroecuador technicians, in a visit to block 43 of various media, as part of the information campaign that Petroecuador is carrying out to explain to the public the consequences of the victory of Yes in the popular consultation (that is, in the event that it was decided to suspend the production of crude oil in to ITT).

Thus, Diego Navarrete, an engineer from the Development and Optimization Directorate, confirmed that in 2022 ITT’s Crudo Napo production amounted to 50,613 barrels per day at an average price of $83.75. However, from this total, discounts must be made for costs and investments ($317 million) and other deductions for the effects of the Amazon Act, transportation and marketing ($103 million). Thus, the tax revenue from ITT represented the state about 1.108 million dollars in one year. The figure is far from the one handled by the Yasunidos collective ($200 million), on the other hand. Among the most important costs is the extraction of each barrel, which according to the Petroecuador certificate is 18 dollars.

But at the same time, the exit of ITT would represent the withdrawal of huge facilities that are currently located on an area of ​​80 ha. (slightly larger than La Carolina Park). These abandonment costs would amount to $500 million in costs. At the same time, compensation would have to be paid to the contractor companies. For this reason, Petroecuador talks about an impact of 16,000 million dollars in 20 years.

Once the National Electoral Council (CNE) approved the call for this consultation with the question: “Do you agree with the Ecuadorian government keeping the ITT crude oil, known as block 43, underground indefinitely? Yes – No”, it was also defined that this Friday, June 23, the phase of registration and training of social and political organizations that want to participate in election campaign for the Yes or No option. Are they Applications are due on Monday the 26th.

If the confirmation wins, there will be a maximum period of one year, after the official results of the consultation are published, for the gradual and orderly withdrawal of all activities related to the exploitation of oil in block 43, as established by the Constitution. The Court, in its opinion, gave way to this process.

Possible output of ITT It is smoothly rejected by the Kichwa and Waorani communities living near the ITT area. This Wednesday several dozen Waorani came out to the Ishpingo sector to make their voices heard in front of the media who were conducting a technical visit, about the fact that they want the oil company to continue with the exploitation of crude oil. Panenky Huabe, president of the Waorani community, as the Kichwe representatives did a day earlier, refused the collective Yasunidos to take over the name of their community to carry out a process that, he assures, will leave them without work and resources. He also confirmed that he had not seen poor environmental management by the oil company. He assured that he knew of other oil operations in other sectors of the Amazon that were disastrous for nature, but that this was not the case with ITT. At the foot of the drill rig of the Chinese company CCDC, in Ishpingo A, Waorani women offered their songs and offered chicha to those present.

But Petroecuador is also considering a scenario where No could win and therefore continue exploitation and improve production in this block.

The CEO of Petroecuador, Ramón Correa, explained that the Yasuní Park has a million hectares, but the ITT block currently occupies only 80 hectares. This is 0.008% of the park. That is, a small part. The Tiputini field is not inside the park. On the other hand, the other two fields: Tambococha and Ishpingo are inside, but neither affects the buffer zone, and the immaterial zone cannot be entered by law. Under these conditions, if the exploitation could continue, that is, if the No would win in the consultation, the maximum use of 150 hectares could be achieved. The plan is to make a road to Ishpingo Sur.

Then “We will continue to the south, there would be no problem in the buffer zone because it has been done for 30 years. On the other hand, in the immaterial zone it is forbidden,” said Correa.

In southern Ishping, the idea would be to raise seven more platforms, with 35 wells per platform, that is: a total of 245 additional wells.

Diego Navarrete, an engineer from the Directorate for Development and Optimization, explained that for this it would be necessary to show that there was already oil activity in the buffer zone, and therefore there would be no impact. According to an optimistic scenario, this could begin in 2025.

This week, ITT reached a production peak of 57,000 barrels. So far, 225 wells have been drilled. Petroleum activity began in Tiputini (outside Yasuní Park) and Tambococha (inside the park) and in April 2022 in Ishping (near the buffer zone. (I)