QUITO – Ecuadorian state oil company Petroecuador and Venezuelan counterpart PDVSA have signed a new contract for the joint development of a field in Ecuador’s Amazon region despite non-compliance with investment commitments under the previous deal.
Ecuador had analyzed the possibility of terminating the joint venture but decided “it was more advisable for both parties to maintain the association,” Petroecuador General Manager Marco Calvopiña said Tuesday at a press conference.
The new contract extends the companies’ agreement to jointly develop the Sacha field through 2026 and requires them to invest $1.27 billion during that period.
Petroecuador will cover 70 percent of the total, corresponding to its stake in the Rio Napo joint venture, while PDVSA will contribute the rest.
The Venezuelan state oil giant also will invest $94 million “at its own expense” in a pilot project for improved reserve recovery, Calvopiña said.
Output at the Sacha field currently stands at 51,200 barrels per day and is expected to climb to 60,042 bpd in 2012, Rio Napo manager Byron Sanchez said.
Calvopiña said output will reach 64,000 bpd in 2013 before declining steadily to 15,000 bpd in 2026. The new contract calls for the drilling of 138 production wells and eight injectors.
Ecuadorian Non-Renewable Natural Resources Minister Wilson Pastor told lawmakers in a recent appearance before the National Assembly that that only $219 million was invested in the Sacha field under the previous contract, or roughly half of what had been pledged.
Petroecuador contributed 81 percent of those funds, a higher proportion than its 70 percent stake in the joint venture, while PDVSA invested 19 percent.
Lack of investment led to a failure to meet the contract’s stated output targets, Calvopiña said Tuesday.
To bring its contribution in line with Petroecuador’s, PDVSA will invest $24 million shortly in the joint venture, PDVSA Ecuador chief Alexi Arellano said at a press conference, noting that $20 million was transferred on Tuesday.
He also announced that PDVSA has acquired three new oil drills and plans to use them at Sacha and other wells in Ecuador pending approval by Quito.
Under the new service contract, the joint venture will receive $17.06 per barrel extracted at Sacha, Calvopiña said, adding that the rate will be adjusted annually to ensure it conforms to oil price indices.
PDVSA also is partnering with Petroecuador on the construction of the $12 billion Pacific Refinery, a facility Ecuador hopes will end its dependence on imported fuels.
The two countries have contracts for the exchange of Ecuadorian crude for Venezuelan petroleum derivatives and Arellano announced Tuesday that PDVSA will transfer 14 percent of its stake in the Dobokubi field in Venezuela’s massive Orinoco Oil Belt to Petroecuador.
That field currently yields 6,200 barrels of oil per day, but output could rise to between 25,000-30,000 bpd, Arellano said.
Cooperation between the state oil companies is an extension of the close political ties between Venezuelan President Hugo Chavez and Ecuadorian counterpart and fellow leftist Rafael Correa. EFE