Ecuador to seek partial waiver from new Opec pact

Ecuador is considering a strategy to insulate its Ishpingo-Tambococha-Tiputini (ITT) heavy crude project from a possible extension of the Opec and non-Opec price stabilization accord, strategic sectors minister Augusto Espin told Argus.

Under the existing agreement forged in December 2016, Ecuador pledged to limit production to 522,000 b/d for six months starting in January, down from an average of 548,000 b/d in 2016. Opec members are currently evaluating market conditions to determine whether to renew the pact for the second half of 2017.

Espin acknowledged that the government could petition Opec to leave ITT out of any future extension. "We are thinking about it. Production at the ITT block cannot be interrupted," he said.

State-owned PetroAmazonas will continue to develop ITT, with the Tambococha oil field launching production by October at 20,000 b/d and reaching 70,000 b/d by mid-2018, the company's chief executive Alex Galarraga told Argus.

PetroAmazonas started developing ITT last year. The complex holds an estimated 1.67bn bl of 14˚-15.5˚API reserves. PetroAmazonas plans to invest some $300mn in 2017 in the block, out of a total investment of $1.7bn this year, according to Galarraga.

Production at Tiputini, the first of the three ITT fields to be tapped, started at around 20,000 b/d in September 2016, reached 44,000 b/d in the first half of March and will ramp up to 60,000 b/d by April, Galarraga said.

PetroAmazonas is holding back production to 430,000 b/d in the first half of the year to comply with its Opec quota, but the company plans to increase output to 450,000 b/d in the second semester.

Quito hopes to offset revenue losses from the current production restriction by selling its Oriente and Napo grades at an average of $42/bl in 2017, some 18pc above the 2016 average export price, according to the central bank.