PetroEcuador management changes hands, again

State-owned PetroEcuador appointed engineer Marcelo Proano as its new interim chief executive to replace Carlos Tejada, who resigned yesterday after 10 months in the role.

Proano had served as PetroEcuador's transport manager immediately before taking the place of Tejada, who stepped down for "personal reasons."

Proano is the eighth chief executive at the corruption-shaken firm over the last 41 months.

On the eve of his resignation, Tejada disclosed that PetroEcuador laid off around 100 employees who are under suspicion for corruption and will be investigated, including administrative, financial and accounting personnel, and staff from the international trade and the purchasing departments.

Three of PetroEcuador's former chief executives are in prison: Marco Calvopina, Carlos Pareja Yannuzzelli and Alex Bravo. Bravo and Pareja were convicted for racketeering and bribery, and Calvopina for racketeering. A fourth former chief executive, Pedro Merizalde, is under investigation for alleged perjury and money laundering, but he denies any wrongdoing and has fled the country. All of them served under former president Rafael Correa's 10-year administration which ended in May 2017.

Correa was succeeded by sitting president Lenin Moreno, who launched a four-year plan to fight corruption, reduce bureaucracy and cut public spending. Under the plan, Ecuador has started to gradually merge downstream company PetroEcuador with its upstream counterpart PetroAmazonas. The process is scheduled to be completed by 2021.

A senior PetroAmazonas official told Argus that since PetroEcuador is in "such bad shape" that the upstream company is likely to lead the merger process.

Among the irregularities found by Tejada in PetroEcuador are balance sheets that are not in compliance with international financial reporting standards. The company has yet to face the consequences of a string of costly but defective projects, including the $600mn Pascuales-Cuenca products pipeline built by scandal-tainted Brazilian contractor Odebrecht.

The list also includes the $600mn Monteverde LPG import terminal, a year-long but faulty $2.3bn overhaul and maintenance program at the 110,000 b/d Esmeraldas refinery and two controversial earthmoving and construction of a water system contracts awarded to Odebrecht at the site of the projected 300,000 b/d Pacific refinery.

PetroEcuador is now awaiting the conclusions of an international auditing process launched in cooperation with the UN Development Program to evaluate the projects, and controller's office reports, before taking legal action, according to Tejada.