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Case Study: Citibank Funds Oil Expansion in Amazonia

Citibank has played a deciding factor in supplying the financing and credibility for oil expansion in Ecuador, Colombia, and Brazil.

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In 2017, Citibank was the sole underwriter on $615.3 million USD in bonds issued by Petroamazonas (now PetroEcuador) to repay debts to vendors and service suppliers especially Schlumberger – the oil company owed over $850 million USD for oil drilling in the Shushufindi and Auca blocks in the Ecuadorian Amazon between 2015 and 2017. Citibank’s involvement in the deal also lent much-needed credibility to the state-run oil company, which went on to start a massive drilling campaign with Schlumberger in the ITT Block in Yasuni National Park.

In 2020 Citibank, along with Itaú Unibanco, provided GeoPark with a bridge loan to secure GeoPark’s acquisition of Amerisur — a small Colombian oil producer with a history of polluting Indigenous territory in the Amazon. Citibank and Itaú Unibanco then acted as book-runners for a $350 million USD bond issuance for GeoPark that raised the capital to pay for the purchase. The Amerisur acquisition brought GeoPark into the Colombian Amazon and with it all of Amerisur’s dirty legacy in the Putumayo, including the Platanillo block where Indigenous Siona peoples allege that Amerisur polluted their waterways and compromised their health and livelihoods. GeoPark saw the acquisition as an opportunity to use the Platanillo block, the most commercially viable block in Amerisur’s operations, as a “steady cash flow base” while expanding oil production in other “highly prospective exploration licenses” i.e. expanding oil production to other blocks that overlapped Indigenous territory in the Putumayo (e.g. PUT-8, PUT-9, and PUT-12) where GeoPark had capital commitments in 2021.

5 teal charts with white numbers in the upper middle and name of five banks below each of the five charts

In 2022, Citibank took a leading role in bond issuances made by Eneva SA, including raising capital for the construction of TPP Azulão, a 295-megawatt natural gas-fired thermoelectric plant in the state of Amazonas. The plant has faced opposition from Brazilian environmental groups who point out that the plant was rushed through environmental permitting with no time for proper impact assessment for a project that threatens local air and water quality and will contribute significantly to greenhouse gas emissions. The plant will generate electricity from the Azulão gas fields, which started production in 2021 and will expand to meet the growing demand.

Citibank has played a deciding factor in supplying the financing and credibility for oil expansion in Ecuador, Colombia, and Brazil.

In each case, Citibank has played a deciding factor in supplying the financing and credibility for oil expansion in Ecuador, Colombia, and Brazil. For a bank that wants to “drive the transition to a net zero economy and make good on the promise of the Paris agreement,” as CEO Jane Fraser was recently quoted as saying, Citibank is not putting its money where its mouth is. Citibank should immediately stop financing the expansion of oil and gas in Amazonia instead of continuing to do business on a path that will certainly break the promise of staying under 1.5C envisioned by the Paris Agreement.

This is a re-publication of a case study on Citibank from the 2023 Capitalizing on Collapse report. Read the original case study published at Stand.earth here.

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