Global Policy Forum

By Juan Forero

As international energy companies move into the Amazon basin to tap some of the last untouched oil and natural gas reserves, more and more natives are fighting to keep them out. Oil workers and contractors have been kidnapped, company officials say. Equipment has been vandalized. Protests, injunctions and lawsuits are piling up as Indian groups grow increasingly savvy in their cooperation with environmentalists.

The governments may increasingly regard the Amazon as an engine for economic growth, but native groups are struggling to balance development with the desire to preserve a nearly primordial way of life. "Let the military come in, because we will defend to the last," said Medardo anti, a leader of Kichwa Indians in an unspoiled jungle region that has been apped for oil exploration in Ecuador, where the dispute is most contentious. "As long as we live here, we will defend our rights."

How this struggle plays out will determine whether Amazon resources become a critical part of Latin America's development and an important component of the American strategy to diversify energy supplies beyond the Middle East. Latin America already provides more oil to the United States than the Middle East does. Plans for new oil and gas fields are speeding ahead, pushed by companies from as far afield as China and including Occidental Petroleum of Los Angeles, Repsol-YPF of Spain, EnCana of Canada and Petrobras of Brazil.

Governments are increasingly trying to lure investors and identify potential reserves along 1,000 miles of forests and Andean foothills, from Colombia to Bolivia. In Peru, one of the largest energy projects in Latin America is under way, a development that could cost $3.6 billion and include nearly 800 miles of pipeline and coastal plants to ship butane, propane and liquefied natural gas to California by 2007.

In Brazil, the government plans a multibillion-dollar development that includes a $1 billion project to pipe gas through part of the rain forest. Oil companies are taking the first steps to explore in the Beni and Pando Departments of the Bolivian Amazon. Even Colombia, grappling with relentless guerrilla violence, has mapped out potentially oil-rich Amazonian blocks for prospecting.

But in no country is Amazon oil exploration as potentially lucrative as in Ecuador, a country the size of Nevada that has, for better or worse, hitched the fortunes of its 13 million people to oil. The country's 4.6 billion barrels of proven reserves are among the largest in Latin America. Oil already accounts for nearly half its exports. With the recent completion of a $1.3 billion, 300-mile pipeline by a foreign consortium, the government deepened its commitment to eventually doubling production, to 850,000 barrels a day.

If development in the jungle moves unhindered, the Ecuadorean Amazon could yield as much as 26 billion barrels in oil reserves, enough to rival Mexico and Nigeria, according to a hopeful 1999 study by the Ministry of Energy and Mines. "This basin has a lot of opportunities," said one foreign oil executive, who spoke on condition of anonymity for fear of igniting controversy, "if we can get there and work it. That's why we are hanging on."

So far, oil executives and industry analysts say, threats from native groups are still less likely to drive off investors than the government's own tax increases and changes in agreements. But for the companies, dealing with Indians has proved arduous. Some have tried to placate tribes with everything from chain saws to outboard motors. Others focus on building schools and clinics. Some employ experienced anthropologists to help make deals.

"When we did our seismic testing, we suffered kidnappings, fires and robberies," said Ricardo Nicolás, general manager here of Cia. General de Combustibles, an Argentine company that has the contract to develop fields north of Pumpuentsa. "It's been seven years and we haven't been able to get started; seven years and $10 million."

Faced with growing opposition, the government of President Lucio Gutiérrez said it was prepared to provide military protection so oil companies could complete the needed seismic tests. "The petroleum does not belong to them," Carlos Arboleda, Ecuador's minister of energy and mines, said of the native groups. "The oil belongs to the state."

Indian leaders disagree. Even though the Constitution does not give Indians groups the rights to oil and gas, the reality is that unless a company obtains their consent, exploration can be impossible. "We are the owners of the jungle," said Antonio Wasump Samaraint, 68, a wrinkled elder who wore the red-and-yellow feathered headband of the Achuar. "We have always rejected the petroleum companies."

Much of the riches, Mr. Arboleda said in an interview, will come from drilling in jungle regions, like the Ishpingo, Tambococha and Tiputini fields in the east, that are among the most ecologically sensitive. The government says these areas contain as much as 2 billion barrels in heavy crude oil, which could one day mean 200,000 barrels a day of production. "The future is in the exploitation of all those areas," Mr. Arboleda said.

That future will be increasingly uncertain and conflict-ridden, many oil executives concede, without some compromise and compensation for the Indians who live there. Quietly, they have started prodding the government to ensure that the $30 million or so they pay in taxes each year to a special Amazon development fund reaches the villages.

Little of that money, indigenous leaders and company officials agree, has brought tangible benefits in the east, where tribal leaders complain of bare-bones schools, rutted roads and rudimentary health services. "The money goes to the big cities, to build big roads," said Santiago Kawarim, 36, an Achuar leader and teacher. "The money never goes to these communities."

Here in the softly rolling hills and lush rain forests of Pastaza Province, in southeastern Ecuador, environmentalists are determined to head off any exploration by making a stand at two blocks, almost a million acres in all, that have already been mapped for drilling. The northern one, Block 23, is to be developed by Mr. Nicolás and his Argentine company. The southern block, No. 24, is operated by Burlington Resources of Houston. "We believe 23 and 24 can be a kind of Waterloo for the oil industry in the Amazon," said Kenny Bruno, who coordinates campaigns in Ecuador and elsewhere for EarthRights International, an American group.

Three tribes here—Kichwa, Achuar and Shuar, each with a few thousand members—have become equally adroit at making their case before gvernment officials in Quito or at the Organization of American States in Washington and at shareholder meetings in Houston. The tribes owe much of their effectiveness to American environmental groups like Amazon Watch, the Pachamama Alliance and Earthrights International, which help organize protests, supply airplanes and set up meetings with American legislators.

The Kichwa people of Sarayaku, the main town in Block 23, are among the most sophisticated. Their leaders operate a budding ecotourism business. Their Web site, www.sarayaku .com, gives a play by play in their battle against oil drilling, and a New York public relations firm has contacted the media on the group's behalf.

Though oil officials say those trappings have corrupted indigenous leaders, tribal members say the contacts have made them more adept at defending their territory. "They've accused us of being terrorists and now they say we are being manipulated by nongovernmental organizations," said Patricia Gualinga, a Kichwa leader who frequently travels to Quito and abroad to make her case. "They also say it is one community that is resisting. It is not. It is an entire people."

For many indigenous leaders, opposition to big oil is colored by the destruction that befell northern Ecuador and the region around Lago Agrio. There, a Texaco subsidiary left widespread pollution, dumping waste into waterways and leaving behind hundreds of unlined pits brimming with toxic wastewater, a lawsuit filed in New York—and later in Ecuador—has charged. ChevronTexaco—Texaco merged with Chevron in 2001—denies causing the pollution, but the case recently went to trial in Lago Agrio. It has yet to be decided, but the publicity has given fresh momentum to oil's opponents.

"People in the south have a historic perspective of the oil industry: what happened in the north," said Patricio Pazminio, a lawyer with the Center for Economic and Social Rights, a group in Quito that is helping the Indians. "So when the companies talk of extending activities into the south, people worry."

For oil company representatives like Herb Vickers, an American who has worked on oil development in Ecuador for seven years, such talk is frustrating. He said that when he oversaw development of Block 10, to the north of Sarayaku, for Arco, the company employed the most modern technology to protect the jungle. Using helicopters to bring in equipment, a pipeline was laid without having to construct a road, because that would have meant a corridor for colonists and their vast clear-cutting of forests.

Drilling in Block 10 is conducted from a single site, a six-acre tract with 12 wells, instead of rigs spread across a broad area. Special drill bits are steered to dispersed underground reserves. Waste brought up with the oil is treated and reinjected into the ground. "We believe, very strongly, that exploration and production can be done in an environmentally friendly manner," Mr. Vickers said.

Many indigenous people say they want improvements; the question is exactly what, and through what means. Some changes, like clinics or schools, are welcome. Others, like petroleum production, are often not. "The majority of these people face an incomprehensible world," said Teodoro Bustamante, an anthropologist and expert on indigenous groups. "They want to selectively incorporate features from the modern world. They want an airplane. They want a radio. They want medicines. The problem is, it is very hard to selectively incorporate."

In Canelos, a Kichwa community on the Bobonaza River on the edge of Block 23, villagers said they welcomed the oil companies because they would bring improvements. But villagers knew little about how those improvements would come, or in what form. All they knew was that their community was impoverished. "We want to change, we want to develop," said Edwin Illanes, 29, one of the leaders. "Here, there's no water. There is no light. We have no paved road. Nothing."

But across a swath of forest in Sarayaku, the main Kichwa town, people were virtually united in their opposition. Villagers gathered by the dozens in a communal meeting hall next to the soccer field to condemn any plan for oil exploration. Members of the tribe acknowledged their poverty. But as Ambrosia Malaver, an elderly woman who spoke in her native tongue, put it: "We live barefoot like our ancestors, and that's what we want."

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