Monday, April 11, 2011

Oil companies to invest $1.38 billion in Ecuador

Oil companies and consortiums operating in Ecuador under service provider contracts will invest $1.38 billion in the Andean country during the 2011 to 2025 period.

As per UK Trade & Investment Report of May 2010, Ecuador is the fifth-largest producer of oil in South America and the smallest oil producer in OPEC., with an assigned production quota of 520,000 bbl/d from which 368,000 bbl/d exported and 152,000 bbl/d consumed locally.

Companies investing in the oil sector include China's Andes Petroleum and PetroOriental, Italy's Eni, Spain's Repsol YPF, and Chilean state oil and gas company ENAP.

Andes Petroleum Ltd operates in Tarapoa Block and the Lago Agrio Storage and Transfer Station (Sucumbios).

PetroOriental S.A. operates in blocks 14 and 17 (Orellana).

Eni has been operating in the Campo Villano oilfield (Pastaza province).

  • The investments will be made in 14 oil fields, with about $1.1 billion going into production while the rest will be invested in exploration
  • 87% of the investment  will be invested up to 2014
  • For this year oil companies are seen investing $468 million, of which $409 million will be invested in production activities and $59 million in exploration.

In January Ecuador's government concluded almost three years of negotiations aimed at gaining more control over its natural resources and increasing its oil revenue by replacing production-sharing deals with services contracts. The services contracts turn the companies into service providers for the exploration and extraction of hydrocarbons. Companies will receive a fee rather than sharing profits.

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