Calilegua National Park is a biodiversity hotspot, containing valuable habitat for many species.

JHP International Petroleum Engineering plans to drill in an area of the park that experts say is a natural corridor between two important ecosystems.

The company’s own environmental impact assessment showed risks of oil spills, fires, and landslides; surrounding communities point to degradation of their land from previous drilling.

Pedestrians forming the usual throng on Buenos Aires’ Calle Florida were surprised to encounter a large “oil drill” in the middle of the busy shopping street several weeks ago.

The installation was a trademark stunt from Greenpeace. If its location was visually “absurd” it was chosen to highlight what the environmental group says is the equally absurd prospect of oil extraction taking place in one of Argentina’s most iconic national parks many miles to the north.

Inaugurated in 1979, Calilegua National Park in Jujuy province covers 76,306 hectares, much of it Yungas rainforest. It is considered a biodiversity hotspot and is home to a wealth of wildlife including more than 270 bird species such as the toco toucan and the majority of the country’s most famous species like the jaguar and Andean condor.

However, Greenpeace, local indigenous communities living on the border of the park, park rangers and local and national politicians all claim this biodiversity is at risk due to the decision to allow Chinese company JHP International Petroleum Engineering to drill for and extract oil until 2037.

“Exploring for oil within a national park is absurd, illegal and, above all else, dangerous,” Hernan Giardini, a forest campaigner with Greenpeace Argentina told Mongabay. “The company presented an environmental impact study that says there are risks of contamination from oil spills, fires and landslides on more than 20,000 hectares of land, which is an area equivalent in size to Buenos Aires.”

According to opponents of the project, the planned oil exploration in the 5,600-hectare Yacimiento field violates the National Parks Act and hydrocarbon legislation.

The Greenpeace campaign is in full swing. Following the release of a report on the planned drilling in June and then the activity in Buenos Aires several weeks later, more than 100,000 people signed a petition calling for the contract to be cancelled and there have been other protests . On the 35th anniversary of the park’s creation, a birthday cake was delivered on the steps of the provincial government headquarters in Jujuy.

But the quest to search for and extract oil in the area has longer roots. The state-controlled energy company Yacimientos Petrolíferos Fiscales first began work and established oil wells in 1969 prior to the designation of national park status. Expectations were high for a while as the oil produced benefitted the local economy. But output levels soon dwindled and with the creation of the protected area a decade later the oil concession bounced around a few different owners before landing with state-owned company Jujuy Mining and Energy (JEMSE).

Guillermo Nicolossi is a park ranger who has worked for many years in Calilegua. He and colleagues have documented since 1997 how local water sources have been polluted by chemicals such as cadmium, chloride and lead, which are linked to drilling activities.

The risks and environmental damage posed by extraction have long been glaringly evident and the decision to reopen several previously abandoned wells in 1992 after the privatisation of YPF was , Nicolossi said. News last year that JHP was to be given the official thumbs up to expand operations and open new wells and pumps came as an even bigger surprise.

“The National Parks Law expressly prohibits hydrocarbon activities in protected areas,” Nicolossi told Mongabay. “However the original concession of the Yacimiento site and its subsequent transfers were all approved by national and provincial decrees, seeming to suggest authorities were oblivious to the existence of the Calilegua National Park.

“This is the legal contradiction that the oil industry is founded on, ignoring regulatory standards in order to allocate the same territory for conflicting usages.”

In October 2012 one such provincial decree announced the site had been transferred to the control of JHP. This was followed in 2013 by a memorandum of understanding with JEMSE that permitted the Chinese company the right to exploit oil in the area for a period of 24 years until 2037.

At the end of last year the results of the environmental impact study were presented with the aim of advancing operations. The total amount invested in the project by JHP is expected to reach about $69 million.

Also at the end of 2014 the National Parks Administration sent a letter to the responsible state authorities in Jujuy stating that the company’s proposal was “inappropriate” because it contravened existing legislation.

“These environmental liabilities have not been addressed,” said Hernan Giardini. “The company continues to operate and move forward with their plans for expansion.”

In June 2014, even before the results of the environmental impact study, the then-head of Argentina’s cabinet, Jorge Capitanich, stated in a communique to the country’s House of Representatives that there was a severe risk of pollution in Calilegua from abandoned oil pumps that were not properly sealed. He also said there was a risk of fires and oil spills.

The park’s surrounding areas are home to a number of indigenous communities including the Guaraní, Kolla and Ocloyas. They claim exploration and drilling within the park’s boundaries has had profound effects on their own homes and habitat.

Last year the General Assembly of the Guaraní Nation sent letters to both the governor of Jujuy and the National Parks Administration in which they stated that prior to any drilling in the park the project required the Free, Prior and Informed Consent (FPIC) of any communities claiming they would be affected.

They claim drilling expansion will significantly harm the environment and wildlife by accelerating deforestation and degradation and contaminating water sources. They have yet to hear back from authorities.

Indeed neither the company nor the Jujuy government have responded to the criticism at any length. They did not reply to media inquiries from Argentinian papers last year, nor have they reacted to Greenpeace’s complaints, the organization says.

Mongabay.com tried to contact both for a comment but received no reply.

The Yacimiento field is situated in the northwest of Calilegua National Park and experts say the area is irreplaceable as it constitutes a natural corridor between the two ecosystems of mountainous Yungas rainforest and the vast expanse of the lowland Chaco forest.

While not as well endowed with forests as some of its Amazon-covered neighbors, Argentina still boasts 39 million hectares of tree cover with the Yungas and Chaco historically the most susceptible to deforestation.

The JHP investment in Calilegua is just one example of an increasing trend of Chinese money flowing into projects in Argentina for oil exploration and the construction of infrastructure including dams, railways and nuclear power plants.

The controversy over the environmental risks of such projects can be seen elsewhere in South America and some worry that the status of protected areas is increasingly being undermined.

In Bolivia, Evo Morales has been criticized for allegedly opening up the country’s forests to agriculture. His counterpart in Ecuador, Rafael Correa, has flip-flopped over oil exploration in the country’s protected Amazon regions. China has already pumped 11 billion dollars into state-owned banks and accounts for 57 percent of all foreign investment in the country.

China’s investments are raising concerns over the state of the environment. Members of indigenous communities in the remote Condor Mirador region near Ecuador’s border with Peru began a “march for dignity” this month to protest the effects of Chinese mining operations in the area. It will reach the capital Quito on August 13th.

In Argentina, Hernan Giardini and other environmentalists fear the government’s seeming inability to move from the pursuit of fossil fuels will have serious consequences. It is not only in the north of the country where prospecting for oil is provoking opposition. In the extreme south, locals in Patagonia have mobilized to ensure the Auca Mahuida protected area remains oil-free.

“We are watching with great concern how Argentina, rather than fulfil its great potential for wind and other renewables, continues with its thirst for oil,” Giardini said. “To drill for oil in a national park violates three laws, sets a dangerous precedent and is the worst example of an oil expansion policy that society must do its best to see stopped.”

Disclosure: In late December 2015, it came to light that the author was a public relations contractor for Greenpeace at the time of this story’s publication. The author says this affiliation did not influence his reporting. The story was independently edited and fact-checked by a Mongabay editor.