Maria is at a debt conference in Equador this week and tipped me about this very interesting case.
Ecuador is burdened with over 15 billion dollars of external debt. The Ecuadorian state-owned oil company Petroecuador have just discovered the largest untapped oil field in Equador (ITT), estimated to contain ~ one billion barrels of oil equivalent. With todays oil price, that is worth ~ 70 billion USD. Of course, there are also lots of costs linked with oil production (Petrobar estimates 5 billion USD), but still tapping the field would make a huge difference for the Equadorian economy!
Unluckily the oil field is located in the Equadorian rainforest, part of the Amazon-belt. But the Equadorian government have come up with an original solution: they will leave the oil field untapped if the international community offers to compensate the country with half of the forecasted lost revenues! President Correa estimates the compensation at around .35 billion USD per year.
“Ecuador doesn’t ask for charity,” said Correa, “but does ask that the international community share in the sacrifice and compensates us with at least half of what our country would receive, in recognition of the environmental benefits that would be generated by keeping this oil underground.”.
Read more at Environmental Newswire