Yasuni is Worth $18b in Present Value but What is the Net Present Value?

ECUADOR - In Brief 04 Oct 2013 by Magdalena Barreiro

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As all expected, the National Assembly declared of "national interest" the exploitation of the Yasuni oil reserves.  With 108 votes against 25, legislators included blocks 43 and 31 in the document.  However, the approval excludes activities in the "intangible zone" --the area where the Tagaeri-Taromenane nomad tribes known as the non-contacted people live and move.The truth is that determining this zone is almost impossible so the exclusion was introduced by the official party just to be protected from being accused of possible ethnocide while at the same time opening the door for the government to decide how to proceed in the future. President Correa acknowledged these difficulties and added "if they accuse me of ethnocide, let it be.  I will prefer to protect children from dying out of diarrhea".  In addition Ishpingo South is critical to maintain the current rate of oil exploitation once the old camps stop production in around 8 years.ITT holds 919 million barrels of heavy oil.  Camps Ishpingo South and Obe have together 437 thousand barrels per day or almost half of the total.  Edmundo Brown, Vice president of Petroindustrial declared that exploitation of these resources would be limited and much more costly given the highly sophisticated technology the government is promising to use.  "While vertical technology costs around $6 million, horizontal technology would range between $15 to $20 million per well". Transportation will add to costs due to the heavy gravity of the oil (12-14 degrees API).  This will force to install refining stations in situ said the expert.The government has estimated to receive revenues worth  $18b in present value from these camps.  Give...