Ecuador suspends pipeline work after trees damaged
Date: 30-Jan-03
Country: ECUADOR
The Environment Ministry suspended pipeline construction near the Mindo-Nambillo protected forest, an important site for bird-watching that has been the source of a lengthy feud with activists who don't want the project built there.
The Ministry ruled that pipeline builder OCP Ecuador SA damaged plants and habitats for local species while installing an apparatus to transport pipe to an ecologically sensitive area near Mindo, outside Quito.
"It is not our intention to put the license or contract at risk. But that means all the norms in the license must be met," Environment Minister Edgar Isch told reporters. Isch took office two weeks ago, appointed by the country's new president, Lucio Gutierrez.
OCP's newly named president, Bernardo Tobar. told Reuters that construction met environmental standards and would not be delayed by the suspension. Tobar said the company hopes to complete work near Mindo by the end of February.
Ecuador is counting on the new pipeline to raise its crude transport capacity, opening the door for fresh exports that could flood fiscal coffers with much-needed revenues.
Currently Ecuador just has the state-run Transecuadorean Pipeline, with a capacity for 400,000 barrels per day. The new project will be able to transport 450,000 bpd from Amazon oil fields to a coastal port. It is expected to start pumping in June.
Isch also said he wants to discuss a plan to charge OCP a fee for using native forest during construction. He would charge the firm $2 for each cubic meter of forest used or destroyed, as the country has done for other projects.
Tobar said he was not aware of plans to charge this fee.
OCP is made up of EnCana Corp. (ECA.TO), Agip Petroleum (ENI.MI), Occidental Petroleum Corp. (OXY.N), Perenco, Repsol-YPF (REP.MC), Perez Companc (PCH.BA) and Argentine construction firm Techint.
