Burlington Ecuador Oil Project Seen Facing Showdown | Amazon Watch
Amazon Watch

Burlington Ecuador Oil Project Seen Facing Showdown

April 21, 2004 | C. Bryson Hull | Reuters

Houston – A long-running fight to halt oil exploration in the Ecuadorean Amazon by U.S. independent energy producer Burlington Resources (BR.N: Quote, Profile, Research) and its partner is is nearing potential conflict with the threat of military intervention looming, indigenous leaders said yesterday.

“If it comes to the last resort, we will defend our territory,” said Pablo Tsere, a Shuar Indian and president of the tribal federation FICSH. “We will not allow ourselves to be humiliated by the armed forces.”
Ecuadorean Indians who live in exploration Blocks 23 and 24, deep in the country’s southern tropical rainforests, have managed to prevent oil work there since ARCO first won the concessions in 1998.

But on March 31, a senior Ecuadorean military commander warned tribal leaders that interference with oil exploration would be met with force, a tribal leader and an environmental group supporting him said.

For its part, the Houston-based independent oil and gas exploration firm said it told the Ecuadorean government it does not want any violence used and does not anticipate conflict in the region.

“We do not condone the use of force to obtain entry to the blocks. We believe that access can only be obtained through peaceable negotiations,” Burlington spokesman James Bartlett said.

Indigenous groups, worried their land could suffer the environmental damage that befell northern Ecuador’s Lago Agrio region, have undertaken kidnappings, demonstrations and the occupation of airstrips to keep oil workers out.

That has led to a constant state of force majeure, keeping Burlington and its Argentine partner, CGC, from performing enough work to see whether the million-acre (404,685 hectares) prospects are even worth drilling.

Tsere, speaking in Spanish, told reporters it would be difficult to forge a compromise with the oil companies and a government eager to begin pumping the country’s 5 billion barrels of reserves and the oil companies.

MAJORITY RULES?

Burlington has said it would pull out of the project if a majority of the public was against it. But Bartlett said the company’s research shows that about 90 percent of residents in the region favor the Block 24 project.

However, Amazon Watch, a California environmental group that has taken up the Indians’ cause, disputed Burlington’s findings.

“Unless Burlington Resources has Arthur Andersen doing its number-crunching on indigenous people, it doesn’t add up,” said Amazon Watch spokesman Kevin Koenig, referring to the former Big Five accounting firm that collapsed after helping Enron Corp. (ENRNQ.PK: Quote, Profile, Research) dress up their finances.

Burlington owns a 50 percent interest in Block 23, and 100 percent of Block 24. CGC operates Block 23 and holds the remaining 50 percent interest.

Tsere and another tribal leaders, with proxies granted by groups controlling 36,000 shares who support their efforts, plan to speak at Burlington’s annual meeting yesterday in Houston.

It is not the first trouble Burlington has faced in the Amazon region. In December, Burlington said it was pulling out of its share of Block 64, a Peruvian oil concession along the Ecuadorean border where many of the same tribal groups fought their efforts.

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