Quito (Platts)--14Apr2014/545 pm EDT/2145 GMT

Yasunidos, an environmental organization, is preparing efforts to follow through on its drive to force a referendum on development of Ishpingo-Tambochoca-Tiputini (ITT), Ecuador's biggest untapped conventional oil field, a spokesman said Monday.

"We will present a list of 200 observers to the national electoral board (CNE) tomorrow to monitor the verification of signatures," Patricio Chavez told Platts in an interview.

On April 12, Yasunidos handed in more than 750,000 signatures to the CNE, which critics say is controlled by populist president Rafael Correa, who wants to develop ITT inside the Yasuni National Park.

"We handed in 548,000 signatures corresponding to 5% of the electoral roll, plus the 30% that we were told (by Correa) would be disqualified, plus one thousandth as a little bit extra," said Chavez, referring to Correa's pledge that oil development would affect less than one thousandth of the Amazon rainforest preserve.

In 2007, Correa had pledged to keep ITT's estimated 840 million barrels of recoverable heavy crude underground on the eastern fringe of the Amazon rainforest Yasuni National Park, which holds one of the greatest concentrations of animal and plant species in the Western Hemisphere, if Ecuador received compensation. The scheme called for donations totaling $3.6 billion over 10 years, but initial cash inflows proved well below those demands, leading Correa to pull the plug on the plan in August 2013. Ecuador's congress, dominated by Correa's political vehicle, approved developing oil blocks 31 and 43, which include ITT, inside the park last October.

Yasunidos was formed to demand a referendum in the wake of protests to leave this part of the park untouched by new oil development, along with the southern half of the million-hectare Yasuni Park, already declared an "intangible zone."

Ecuador's Constitutional Court (CC) told the group they had to collect the signatures, equivalent to 5% of the smallest OPEC country's voters, before it would consider qualifying the question it wants to put to voters ("Do you agree that the Ecuadorean government [should] keep the crude of the ITT (field), known as block 43, underground indefinitely?").

In his ruling favoring Chevron over US and Ecuadorean lawyers last month, US district court judge Lewis Kaplan in New York City questioned the court's independence from political interference.

Initially, it will be up to Ecuador's national elections commission, which has also been criticized for being cozy with the administration, to review whether the activists collected enough valid signatures and fingerprints to meet the CC's order.

If the CNE says that Yasunidos collected enough valid signatures within an estimated month, it will be up to the CC to review the constitutionality of the question, after which the referendum would be called within 60 days, Chavez said.

Yasunidos has faced an uphill battle, including rival efforts by a group of Amazon-area mayors voted out of office in February and other attempts to skim off possible signatures.

Oil industry executives say that development of the ITT and the ultra-heavy Pungarayacu oil field is key to Ecuador's long-term survival as an oil exporter. It is currently producing oil at record levels of around 565,000 b/d, but that could drop if the new fields did not come online.

Development of the ITT would require about $2.8 billion in investment for Tambococha-Tiputini area, plus another $1.2 billion for the Ishpingo area. Peak output from ITT would reach some 200,000 b/d in around five years, according to estimates by state-owned upstream oil company Petroamazonas.

--Stephan Kueffner, newsdesk@platts.com
--Edited by Katharine Fraser, katharine.fraser@platts.com

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