XI Oil Round 550

Ecuador twice extended the deadline for oil companies and investors to bid on a large area of pristine Amazon rainforest suspected of harboring large amounts of oil. After promoting its XI Oil Round internationally, the oil round’s first deadline, set in May, was extended to July and then again to November 28th.

International Promotion Fails to Garner Strong Interest in Amazon Oil Blocks

Speculation about the first two deadline extensions centered around tepid interest in the 16 oil blocks the Ecuadorian government has divided nearly 10 million acres of south-central Amazon rainforest into, with the government stating it was honoring requests for more time to evaluate the blocks from would-be bidders.

The November 28 deadline brought in just three bids on four separate blocks leaving Ecuador’s government with fewer bids than hoped for, and no competing bids on any one block. The lack of interest is attributed to protests from indigenous communities that have territory in and around the area slated for oil development, as well as questions around the quality and amount of oil the blocks harbor, investment risks, and contractual conditions.

A Repeat of History, Indigenous Protest Helps Protect the Amazon

The government has unsuccessfully attempted to auction off parts of the Amazon in previous oil rounds, again due, at least in part, to indigenous protest to oil development itself, as well as the government’s failure to implement the various indigenous nations’ right to “free prior and informed consultation” that Ecuador’s ratification of both ILO 169, and its own constitution oblige it to do.

In the current round, Spain’s Repsol Cuba and China’s Andes Petroleum bid on three blocks, two of which incorporate territory of the Zápara and Kichwa indigenous nations. Also submitting bids was Petroamazonas, in partnership with Enap from Chile and Belorusneft of Belarus.

The Ecuadorian government says it will take five months to evaluate the current bids.

Follow our news history of the XI Oil Round: