Gulf Oil and Gas accountACCOUNT

Ecuador's New Contracts with Foreign Oil Firms

Source: Reuters 11/24/2010, Location: South America

Ecuador began preparations to take over the local assets of Brazil's Petrobras, the only major oil company to refuse to sign new contracts designed to increase state control over the petroleum sector.

Spain's Repsol; Italy's Eni; Chinese operators Andes Petroleum and PetroOriental; and Chile's state-owned energy company ENAP agreed to contracts that will turn them into flat-fee service providers.

Below are some facts about Ecuador's oil industry and the foreign companies operating in the Andean country.

* The pacts replace profit-sharing agreements. The government says it will take 80 percent of revenue under the new deals, up from the current 70 percent.

* Ecuador TLC, a unit of Petrobras, has output of around 19,300 barrels per day from its Block 18 in the Amazon jungle province of Orellana. It is also a stakeholder in a heavy crude pipeline. Petrobras CEO Jose Sergio Gabrielli said its participation in the pipeline was unaffected by the collapse of the contract talks.

* Repsol, with 41,800 bpd of production in Ecuador, is by far the biggest private operator in that country. Under its new eight-year contract, it will receive a $35.95 per-barrel fee from the government.

* The other four companies that reached agreements will be paid $16.72 to $41 per barrel.

* ENAP was the first to sign the new deals. Chilean officials said $72 million would be invested in ENAP's operations in eastern Ecuador as part of the 15-year accord, under which it is to be paid $16.72 per barrel. ENAP estimates production will rise to 16,000 bpd at its fields under the new contract from the current 13,600.

* Andes Petroleum, a consortium led by Chinese National Petroleum Corp (CNPC), produces around 39,000 bpd in its Tarapoa block. It is a stakeholder in the heavy crude pipeline and will be paid $35 per barrel under its new 15-year contract.

* PetroOriental, also owned by CNPC, has two blocks with combined output of 14,900 bpd. It will be paid $41 for every barrel of crude extracted under its new eight-year contract.

* Agip Oil, a unit of ENI, is extracting around 17,300 bpd at Block 10. Ecuador will pay the company $35 per barrel under its new 13-year contract.

* Ecuador, OPEC's smallest producer, has a total output of about 475,000 barrels of crude per day. The government says it expects to close the year with production of 490,000 bpd.

* Refining capacity is 175,000 bpd for Ecuador's three state-run refineries.

* Around 44 percent of production is extracted by private companies. The rest is generated by state-run firms.

* Foreign investment flows have eased during the renegotiations, which began in 2009. Exports from private companies sank 27.6 percent last year from 2008 to 98,869 bpd, while private output fell 14.4 percent to 204,511 bpd.

* Ecuador's feuds with foreign oil companies in recent years include the takeover of local assets of U.S. oil company Occidental Petroleum. The government declared Oxy's contract had expired and its concession should be returned to state control. Citing a tax dispute, the government last year also took charge of the operations of two oil blocks belonging to French oil company Perenco.

Asset Portfolio Management News in Ecuador >>

Argentina >>  4/16/2019 - Qatar Petroleum has won exploration rights in five offshore blocks in the North Argentina, and Malvinas West basins in Argentina. ...
Brazil >>  4/9/2019 - TechnipFMC (FTI) has been awarded a significant contract for Lapa field by Total E&P do Brasil Ltda. (Total), on behalf of the Lapa Field Consortium, ...

Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


Ecuador Oil & Gas 1 >> 

More News

Related Links

AR BM BO BR BS CL CO CU EC FK GY JM MX NF NI PA PE TT UY VE
Gulf Oil and Gas
Copyright Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.