Oil activities suspended at Llancanelo

26/05/2005

The Laguna de Llancanelo (65,000 hectares) in Argentina's Mendoza Province was added to the List of Wetlands of International Importance in November 1995. In July 2001, the Government of Argentina, concerned about possible threats to the sites associated with renewed petroleum extraction activities using horizontal drilling techniques, formally requested that Llancanelo be placed on the Montreux Record list of sites where change in ecological character has occurred, is occurring, or is likely to occur, and at the same time requested a Ramsar Advisory Mission to study the problem and offer advice. Accordingly, Ramsar's Margarita Astrálaga led a team including John Agard (Trinidad), an expert on the impacts of petroleum activities, and Terrence Boyle (USA), an expert on ecotoxicology, assisted by Guillermo Lingua and Heber Sosa of the national and provincial environment authorities respectively, on an advisory mission to the site and region in late October 2001.

The Mission's report, which can be seen here, included a list of recommendations for the national and provincial authorities and for the oil company Repsol-YPF, which were studied by the courts in the preparation of the decision described below.

-- the text below is reprinted from EcoAméricas
(Fourth Street Press), April 2005, page 2.

Court suspends large Argentine oil project

An Argentine court has ordered the suspension of a project in Mendoza province to drill for oil at Llancanelo Lagoon, an internationally recognized wetland.

In a March 14 decision, the Supreme Court for Mendoza province ruled favorably on a complaint lodged by the Mendoza environmental group Oikos Red Ambiental.

Oikos argued that the US$200 million oil project by the Spanish-owned company Repsol-YPF would contravene the Argentine Constitution's Article 41, which grants citizens the right to a healthy environment, as well as a Mendoza law (6045) prohibiting oil and mining activity in the province's protected areas.

It also alleged deficiencies in the project's environmental impact assessment - among them, that the project failed to fulfill public-hearings requirements, inaccurately described the boundaries of the Llancanelo protected area and lacked proper technical review.

The species-rich 160,000-acre (65,000-ha) Llancanelo, a lake and wetland ecosystem in southern Mendoza province, was declared a provincial fauna reserve in 1980. In 1995, it was earmarked for conservation under the 1971 Ramsar wetland-protection treaty.

Though oil companies have worked in the area since 1930, their operations typically have been small-scale. In 2000, however, Repsol-YPF proposed an ambitious plan to install 80 wells using directional drilling, in which wells are sunk at an angle so more than one can be drilled from a single platform. It is unclear how many of the wells were to have been inside the reserve's boundaries.

Repsol-YPF won a 25-year concession for the project in 1993 from Mendoza provincial authorities, who at the time said oil reserves in the area amounted to 35 million barrels.

In 2003, Mendoza authorities approved the environmental impact assessment.They strongly favor the project, saying it would generate US$30-40 million in annual royalties and create 280 jobs.

Last month's court-ordered suspension follows two earlier rulings against the project. Repsol-YPF has declined to comment publicly on the decision, but in court it argued [that] its contract should be honored because it predates the Mendoza law making Llancanelo a protected area. The Supreme Court, however, held that environmental-protection measures should take precedence over private rights.

Mendoza province officials say that despite last month's ruling, they have not given up on the oil project.

They expect a new environmental assessment will be prepared and the project eventually will go forward - unless the new assessment draws a legal challenge.

Follow-up: . . . For court rulings in the Repsol-YPF case (in Spanish), go to www.oikosredambiental.org.ar/llanca.htm.

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