Watching the World: A squabble in Amazonia

Aug. 22, 2005
Ecuador resumed operations at its Sote pipeline last week after several days of protests by residents of the Orellana and Sucumbios provinces in the Amazonia region.

Ecuador resumed operations at its Sote pipeline last week after several days of protests by residents of the Orellana and Sucumbios provinces in the Amazonia region. But it proved an expensive couple of days in more ways than one.

Jorge Pazmino, an operations manager, said Petroecuador was evaluating the damage that occurred on Aug. 16 when protesters in Lago Agrio blocked the pipeline operation station.

A Petroecuador executive already had a pretty good idea of the damage, though, saying crude output had fallen 68% by early Aug. 17 due to the continuing protests. That added up to a lot of revenue-more than $12 million worth.

Petroecuador Pres. Luis Roman said he was “concerned” about the possibility the situation could be further complicated and lead to “a reduction in production just when the price of petroleum is reaching record levels.”

Protest starts

Residents of the two provinces began their protest on Aug. 14 by blocking the main access roads to oil fields in their area, and-for good measure-stopping operations at other key facilities.

In particular, they blocked the runway of the Francisco de Orellana airport, one of the air travel facilities most used by personnel of oil companies operating in Amazonia, including Occidental Petroleum Corp., EnCana Corp., and Petroleo Brasileiro SA.

The residents know how important their provinces are to the country’s economy: They produce some 75% of the state’s and 50% of private oil production in Ecuador.

The protesters were partly protesting a recent oil spill, but they also wanted companies to hire more local people, to pay higher wages, and to invest more in local infrastructure.

Local reports said one group of demonstrators tried to enter Petroecuador’s Amazonian District but were blocked by army troops.

In Shushufindi, the focus was said to be on Limoncocha, where Occidental operates; here the military clashed with demonstrators, and one leader said they were violently evicted-one woman was wounded with gunfire, and several youths were affected by tear gas.

Clashes erupt

There were clashes in Cuyabeno also, where EnCana operates. The mayor of Putumayo said the army attacked a group of demonstrators who were blocking access to the company; several of them were beaten.

In other municipalities the closing of roads was total. The entrances to Petroecuador and Block 11, which is operated by China National Petroleum Corp., were also blocked. The strike committee reported that, altogether, 25 oil wells in Limoncocha were occupied.

It is not clear exactly how the strike came to an end, whether by force or negotiations. But there can be little doubt that the entire action was more costly-in terms of lost oil revenues and cracked heads-than anyone would want to justify.

A little jaw-jaw beforehand would have kept the oil flowing and the dollars rolling in.