QUITO (MarketWatch) -- Energy Minister Alberto Acosta Wednesday proposed a massive debt swap to avoid developing Ecuador's Ishpingo-Tambococha-Tiputi or ITT oil fields.
"One of the options to leave the crude underground is to carry out a massive bilateral debt swap, government-to-government, with the Paris Club and even with multilateral lending bodies," said Acosta during a teleconference with the University of Maryland.
The Rafael Correa government originally said it would require $700 million a year from the international community to not develop the ITT. It subsequently reduced that amount to $350 million a year for 30 years.
Many environmentalists don't want the ITT to be developed because it is located inside the Yasuni National Park.
According to Acosta, developing the ITT would generate 108 million tons of CO2 and the cleanup will require more than $4 billion.
Acosta formally invited the international community, countries and organizations that defend the environment and seek to combat global warming to support the proposal.
If the international aid is forthcoming, the country will create a trust fund that will be managed by an international oversight body.
Any interest that is generated will be used to fund social development works.
According to Acosta, countries like Italy and Norway, as well as international foundations, the Inter-American Development Bank, the United Nations and universities in the United States have voiced interest in the Ecuadorian proposal.
Italian lawmakers, said Acosta, are interested in pushing for a law that would allow citizens and companies to receive an income tax break by buying certificates representing non-exploited barrels.
In April, Acosta said that the government would wait up to a year for the international community to respond.
The minister has also said that if the country's idea falls through, the ITT field could be jointly developed with PdVSA, which would take a 40% share of the crude produced.
Other companies interested in developing the ITT field are China's China Petroleum & Chemical Corp., or Sinopec, Chile's Enap and Brazil's Petroleo Brasileiro SA , or Petrobras. Those countries have signed a memorandum of understanding with state-owned Petroecuador to develop the field. Energy companies from India, Vietnam and Colombia have also expressed interest.
According to the most recent official estimates, developing the ITT field will require at least $5 billion in investment.
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