Chinese Oil Companies Courted to Invest in Ecuador's 'Amazon Land'

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By EW News Desk Team | March 28, 2013 9:07 AM EST

Ecuador could auction off more than three million hectares of Amazonian rainforest to Chinese oil companies as part of a global road-show to develop its oil industry, reported The Guardian on Tuesday, though the Ecuadorian government may face protests by indigenous groups, who claim to have not consented to any oil projects.

On Monday, officials from Ecuador's Ministry of Non-Renewable Natural Resources, formerly the Mines and Oil Ministry, arrived in Beijing, where they gave a presentation over 13 new blocks to tender in the Putumayo-Oriente-Marañón basin, each of which with an area of around 200,000 hectares.

Ecuador's minister of Non-Renewable Resources, Wilson Pastor, expressed hope that Chinese oil companies would invest in his country, highlighting the two nations' strong trading and political relationships.

"We had to come to China, which is Ecuador's major trading partner and we have many common energy projects," said Pastor, according to Prensa Latina news agency.

"Our goal here is to strengthen cooperation with China and take more companies to Ecuador," he added, claiming that " two or three Chinese companies" may participate in the tender, after a day of consultation.

Besides China, Pastor has also visited Colombia, the United States, France and Singapore in search of oil bids. The Ecuadorian minister, suggested that companies from several Latin American countries, the United States and Europe have already expressed interest in the tender, while Canada was next in his round-the-world trip for investments.

However, the governments' action have already sparked protest from seven indigenous groups who inhabit the land, claiming that they did not consent to any oil projects, as it would devastate the area's environment and threaten their traditional way of life.

"We demand that public and private oil companies across the world not participate in the bidding process that systematically violates the rights of seven indigenous nationalities by imposing oil projects in their ancestral territories," a group of Ecuadorean organised indigenous associations wrote last autumn, as cited by The Guardian.

"What the government's been saying as they have been offering up our territory is not true; they have not consulted us, and we're here to tell the big investors that they don't have our permission to exploit our land," added Narcisa Mashienta, a women's leader of Ecuador's Shuar people.

Related: Brazil's Military Race To Protect Amazon Resources

Related: Brazilian Supermarkets Vow To Stop Selling 'Amazon Meat'

Ecuador's secretary of hydrocarbons, Andrés Donoso Fabara, however accused indigenous leaders of misrepresenting their communities to achieve political goals.

"These guys with a political agenda, they are not thinking about development or about fighting against poverty," he said.

"We are entitled by law, if we wanted, to go in by force and do some activities even if they are against them. But that's not our policy," Fabara added, claiming the government did not open certain blocks of land to bidding because it lacked support from local communities.

Although the land in question is open to global bids, Chinese oil companies are believed to be the favoured investors. Last month, Ecuador received a tranche of $1.4 billion from a $2 billion loan deal from China Development Bank, while Ecuador also owes as much as $7 billion in debt to the Chinese government.

Related: China Surpasses US As World's Top Oil Importer

Related: China's Overseas Oil Output to Rival OPEC Members

Related: Land Grabbing: 21st Century Colonialism?

"My understanding is that this is more of a debt issue - it's because the Ecuadoreans are so dependent on the Chinese to finance their development that they're willing to compromise in other areas such as social and environmental regulations," said Adam Zuckerman, a environmental and human rights campaigner at Amazon Watch. "The message that they're trying to send to international investors is not in line with reality."

Fabara, though, dismissed such claims.

"We're looking for global investors, not just investors from China," he said. "But of course Chinese companies are really aggressive. In a bidding process, they might present the winning bids."

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