Ecuador to offer new refinery, oil port concessions

State-owned PetroEcuador plans to decommission its aging 110,000 b/d Esmeraldas refinery and open an international tender to build a new one for $6bn.

"The Esmeraldas refinery has to close because of pollution. A new one that is less polluting, under Euro 5 [emissions] norms, incomparable to what we have now, will be offered in concession," Ecuador's presidential adviser Santiago Cuesta told reporters in Quito this morning.

The new plant will be designed to process heavier crude and yield cleaner products, Cuesta said.

"The doors for foreign investors are open," he said. "In Esmeraldas there will be $6bn in investment by the private sector, not by the state, which will generate a thousand jobs."

The refinery, the largest in the tiny Opec country, has been plagued by operational problems for years, despite a major overhaul under the previous government of President Rafael Correa that was later determined to be severely flawed.

PetroEcuador conducted programmed maintenance on the 42-year-old refinery from 1 March to 31 July, and subsequently commissioned the fluid catalytic cracker (FCC) for gasoline production.

The oil port of Esmeraldas will also be offered in long-term concession, with 50pc of the revenue earmarked for the city of Esmeraldas as compensation for the contamination caused by the refinery. The other 50pc will go to the government for a five-year period, after which it will shift fully to the city, Cuesta said.

No workers will be laid off, and the assets will remain in state hands, Cuesta said in response to critics from political opponents of the government of current President Lenin Moreno.

Ecuador produces about 550,000 b/d of crude. State-owned PetroAmazonas accounts for most of the output, followed by China's Andes Petroleum, Chile's state-owned Enap and Spain's Repsol, among others.