World

 

Bolivia

Peru

Trinidad &
Tobago

Venezuela






Very usefull links



Institutional
links

 




Services
& Products



Welcome back on
26 -29 August,
ONS 2008

Bridging the energy gap
is ONS 2006 theme,
from 22-25 August,
in Stavanger, Norway


Petroleumworld
Business
Partners
:





 


 

 





Centre for
Global Energy
Studies

 


 

 

Ecuador seeks oil private-sector contractors

 


QUITO

Petroleumworld.com, Mar 05, 2008

Ecuador’s state-owned oil company, PetroEcuador, wants private-sector contractors to develop four fields in the Amazon basin, backing off from plans to involve government-controlled majors from Asia and Latin America in the projects.

The tender for the fields is planned to go ahead towards the end of the first quarter, once environmental reviews and production estimates are completed. The company expects winning bidders to invest about $1bn (€660m, £500m) in the fields over the coming three years.

“There are three companies in the market that can do what we want”, including Franco-American group Schlumberger, and Halliburton and Baker Hughes of the US, said Fernando Zurita, the navy admiral at the helm of PetroEcuador since November, in a recent meeting with journalists.

Despite the six-year boom in the oil industry, Ecuador has failed to ramp up production. The industry contracted by 9 per cent on the year in 2007 after the previous administration stripped the US-based Occidental Petroleum of its concession and handed it to an ill-prepared PetroEcuador.

President Rafael Correa had previously said he wanted to enlist the likes of China’s Sinopec and Indonesia’s Pertamina in the fields. But the idea was dropped following a lengthy meeting with PetroEcuador officials in January, said Mr Zurita. “The plan to involve foreign state-owned oil companies will not go ahead.”

Officials at the oil services companies say they have been discussing the terms under which the tender could work in the Auca, Lago Agrio, Libertador and Shushufindi fields, which PetroEcuador says hold 2.4bn barrels of crude.

Regarding the mature fields, “PetroEcuador’s plans are very ambitious. It would be better to start with one field for a year and proceed from there”, said one official under condition of anonymity.

In a similar scheme, PetroEcuador officials on behalf of the government are negotiating changes in oil contracts with the six main private-sector companies. Rather than sharing in the revenue, the government wants to pay Chinese-owned Andes Petroleum, France’s Perenco, Spanish-Argentine Repsol-YPF, Brazilian Petrobras and US-owned City Oriente for extracting oil.

“Under current conditions, it is reasonable for the government to look for these terms,” said an official at a US oil company that no longer works in Ecuador.

The government is impatiently trying to change the rules of the game in order to benefit from the high oil price. Mr Correa recently gave the companies a deadline of Saturday to agree to new terms. If the companies preferred to leave, the government would compensate them for their investments made so far, he said.

If it manages to meet its production targets for the year, Ecuador will also need to wrestle a higher quota out of the Organisation of Petroleum Exporting Countries, which meets on Wednesday, or break its 520,000 barrels a day allotment just months after rejoining the cartel.

In December, Ecuador produced 531,700 barrels a day, and by the end of the year, PetroEcuador will have a daily output of about 306,000 barrels, including the former Occidental block’s targeted 107,000 barrels.

Occidental’s assets have been passed to PetroEcuador unit PetroAmazonas, maintaining its private-sector structure despite state ownership. That would allow it to retain both operating efficiency and qualified engineers, said Mr Zurita.

Despite flirting with the private sector, however, Mr Correa will not allow any private capital into the state oil sector, Mr Zurita said.



Story
Stephan Kueffner from The Financial Times
The Financial Times 04 03 08

Copyright© 2008 respective author or news agency. All rights reserved.
We
welcome the use of Petroleumworld™ stories by anyone provided it mentions Petroleumworld.com as the source. Other stories you have to get authorization by its authors.

 

 

Send this story to a friend

Your feedback is important to us!

We invite all our readers to share with us
their views and comments about this article.

Write to editor@petroleumworld.com

Any question or suggestions, please write to:
editor@petroleumworld.com





Best Viewed with IE 5.01+
Windows NT 4.0, '95, '98 and ME +/ 800x600 pixels

 

 

   


Contact:
editor@petroleumworld.com/phones:(58 412) 996 3730 or 952 5301
www.petroleumworld.com-Editor:Elio Ohep /
Publisher-Producer:Elio Ohep.
Contact Email:
editor@petroleumworld.com
Legal Information. CopyRight 2002, Elio Ohep.- All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.