Ecuador's president could postpone decision to close ITT oil block

Ecuador's President Daniel Noboa could postpone the decision to close oil production block 43, known as ITT (Ishpingo-Tambococha-Tiputini), given the country's pressing need for public funds to finance the government's war on drug trafficking and criminal groups.

In a referendum held in August, voters chose to close the block in the Yasuní national park in Orellana province, and the constitutional court stipulated a term of one year to shutter operations.

“I think a moratorium is a feasible way [to keep the block open],” the president said in an interview on the Telemazonas television network.

“We're at war … and we have to halt an avalanche of violence and destruction …. It's essential to support the strategy with an increase in income or some form of moratorium in which we can maintain certain revenues until this time passes,” Noboa added.

Last year, state-run firm Petroecuador estimated that the country could lose between US$800mn and US$1.2bn per year in revenue due to the closure of the block and that the company would have to invest around US$654mn in infrastructure related to ending the operations.

The total revenues lost would amount to some US$17.6bn by 2043, according to official calculations.

According to Noboa, the moratorium on the closure of the block should be about 18 months.

ITT, which produces around 58,000b/d of crude oil, has 225 wells, 12 platforms, a crude oil processing plant and a network of pipelines, so experts believe that closure will take several years.

Given that the decision to end operations at ITT was adopted in a public referendum, local analysts believe that Noboa should call a new referendum in order to postpone the closure.