PetroEcuador pulls back on field concession plan

PetroEcuador will not concession the operations of some of its oil and natural gas assets as first planned last year by then minister of energy Juan Carlos Bermeo.

The state oil company will instead look for partners to invest in the 25mn cf/d shallow-water Amistad gas field, the 65,000 b/d Sacha oil field and 110,000 b/d Esmeraldas refinery, PetroEcuador's chief executive Italo Cedeno told Argus. But partners would not have a share of the assets or assume operations.

Bermeo had initially said that the state oil company would prepare a tender to concession the Amistad and Sacha fields and the Esmeraldas refinery.

Cedeno said that PetroEcuador's assets will remain entirely in the hands of the state-owned company and PetroEcuador which will pay service fees to private-sector companies for specific projects. The fees could be paid in cash or in oil or gas at a set market price.

PetroEcuador estimates new investments of around $500mn in Amistad could increase its output to 100mn cf/d from 25mn cf/d and additional investments for $6bn in Sacha could also boost production as well.

For the Esmeraldas refinery, PetroEcuador will look for a private investor to build a new high conversion plant that could boost production of clean products. The new plant could cost around $1.7bn.

The three projects will be tendered this year, Cedeno said.

PetroEcuador is pushing hard to increase its oil production to reach an average of 428,000 b/d in 2022, from 387,500 b/d now.

To attract private investment, the state-owned company is accelerating drilling in recently developed fields, such as Ishpingo in block 43.

The company will in about two weeks have the results of the two additional drills that started operating there this week. Ishpingo is producing around 4,300 b/d, but the company hopes that the field will produce 50,000 b/d by the end of the year.

By Alberto Araujo