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Ecuador to call oil licensing round for 13 Amazon blocks

BY MERCEDES ALVARO

QUITO -- Ecuador said it will call a licensing round on 28th November for bids for oil exploration and production contracts for 13 blocks in the southeast Amazon jungle, near the border with Peru.

The Andean country expects investments of between $1 billion to $1.2 billion for these blocks. Additionally, state-run oil company Petroamazonas plans to negotiate directly with foreign state-owned companies to develop three other blocks in the area. Next month Petroamazonas will take over the exploration and production unit of state-owned oil firm Petroecuador. Ecuador' s minister of nonrenewable natural resources, Wilson Pastor, said at a press conference that companies interested will have a six-month period, until May 30, to prepare their offers.The tender will be called under the current contract regime, which means oil companies that win tenders will be paid a production fee while the government will own 100% of the oil produced.Mr. Pastor said the government expects to sign contracts for the round by the end of September 2013.

According to Mr. Pastor, Ecuador' s southeast is high risk but has great potential.The minister said it is likely that not all of the blocks will receive bids.It is likely that eight blocks receive offers and five don' t,he said.

Mr. Pastor added that companies that win the tender should invest between $5 million to $15 million for each block in social projects for nearby communities. The projects will be carried out by the Ecuadorean government and payments will be made when contracts are signed. That means between $150 million and $200 million for economic and social development in the area,Mr. Pastor said. The government has said that with current reserves and output, Ecuador will have crude oil for about 11 years and the new oil round will widen the country' s oil horizon. Mr Pastor also said that companies such as Repsol, Eni and Andes Petroleum have shown interest in the tender. Meanwhile, state companies from Peru, Colombia, Mexico, Turkey, Chile, Vietnam and Indonesia, among others, have shown interest to join with Petroamazonas. Currently, Ecuador produces about 500,000 bopd.

Dow Jones Newswires

10/22/2012

 

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