Houston – Burlington Resources, a large independent energy company, has been seeking to drill for oil in a remote part of the Ecuadorean Amazon since the late 1990’s, when it acquired an exploration property there. Pablo Tsere, an Indian leader from the same area, has been opposing the company’s efforts for just as long.
Their competing visions clashed here on Wednesday at the St. Regis Hotel, where Burlington was trying to regale investors with descriptions of the profits that its oil and gas exploration activities are producing around the world, at a tightly choreographed meeting for shareholders.
In an unusual example of shareholder activism, Mr. Tsere flew 3,000 miles to Houston to attend the meeting. He sharply criticized Burlington’s plans and called on the company to immediately halt its exploration activities in the area where his people, the Shuar, live with two other indigenous groups, the Achuar and Kichwa.
“I’m here to request that you respect our collective rights,” Mr. Tsere, wearing a feathered headdress, told Bobby S. Shackouls, Burlington’s chairman and chief executive, and about 30 other senior executives and shareholders at the meeting. Speaking through an interpreter, Mr. Tsere asked why Burlington had not yet pulled out of Ecuador.
The subject is very delicate because Ecuador’s portion of the Amazon basin is believed to contain large reserves of oil – some 26 billion barrels, enough to make the country a producer to rival Nigeria or Mexico. Oil exports already account for more than 40 percent of Ecuador’s export earnings, even though exploration and development of the Amazon fields has yet to begin in earnest.
Environmental advocacy groups like Amazon Watch, the organization based in San Francisco that organized Mr. Tsere’s visit, have been fighting oil development in the Amazon.
They started by tangling with the oil industry’s giants, like Royal Dutch/Shell and BP, and scored some successes. But they are now redirecting their protests toward second-tier energy companies like Burlington, and, to the chagrin of some shareholders, the strategy appears to be working relatively well.
Intense opposition from indigenous and environmental groups have kept Burlington from making any headway in the Ecuadorian Amazon since it bought the exploration rights in the area from ARCO in 1999. The rights had to be sold to win regulatory approval for BP to acquire ARCO that year.
“All of our operations in the areas under question are suspended,” said James Bartlett, a spokesman for Burlington, which is now producing just 10,000 barrels of oil a day in Ecuador, in a separate venture. “We have nothing underway,” Mr. Bartlett said.
Amazon Watch frequently aligns itself with indigenous groups to oppose large-scale projects like pipelines, power lines and roads.
The group has used similar tactics with companies like Occidental Petroleum, which operates in Colombia, and the Hunt Oil Company, which has a venture in Peru, adding to the thicket of difficulties that companies face in trying to develop energy projects in the Amazon region.
“It’s easy to portray this as Indians versus Big Oil, but it’s a lot more complex than that,” said Robert Wasserstrom, a Harvard-trained anthropologist whose Houston company, the Terra Group, advises energy companies on ways to deal with opposition by indigenous groups. “The Indian communities in Ecuador are divided into many factions,” Mr. Wasserstrom said. “Indigenous politics in Ecuador is just as complicated as any other kind of politics.”
The nuances were lost on some of the other shareholders who attended the meeting on Wednesday. Ed Naberhaus of New Braunfels, Tex., who came to the meeting to ask whether Burlington had any acquisition plans, stared at Mr. Tsere, who stood out markedly in a crowd dressed mostly in conservative blue and gray business suits.
“I’ve met people from Ecuador, but I’ve never seen a gentleman dressed like that,” Mr. Naberhaus said.
Mr. Shackouls, Burlington’s chief executive, seemed to take in stride the critical comments from Mr. Tsere, who had borrowed shares from a sympathetic investor to take part, and others attending the meeting with him, including a representative from Boston Common Asset Management who raised concerns about the impact of drilling in the Amazon.
After a discussion about increasing Burlington’s shares outstanding and appointing PricewaterhouseCoopers as the company’s independent auditor, Mr. Shackouls listened to Mr. Tsere’s remarks and told him, “We respect your traditions and your land.”
But he gave no indication that the company would give up its plans for Ecuador.
