Ecuador state-run oil company Petroamazonas signed a production contract with Chile's Enap and Belarus's Belorusneft to explore and produce crude in a little-known Amazon region in a project involving an estimated $400 million investment.
Petroamazonas will hold a 51 percent stake in the consortium. Enap and Belorusneft with 42 percent and 7 percent stakes will provide an initial $30 million for exploration of the block estimated to hold 30 million to 50 million barrels.
"In the middle of the world oil crisis, it's some good news, because there is a group of companies prepared to explore in difficult times," said Petroamazonas Chief Executive Officer Oswaldo Madrid.
Ecuador held an international bidding round in late 2012 to find takers for 13 blocks in a remote but promising area near the border with Peru but has not allocated any so far.
Petroamazonas was handed three other blocks in the same area at the time, including Block 28 which the consortium will now explore.
"Block 28 will be the first Petroamazonas asset in Ecuador's southeast. This region hasn't been explored for more than 20 years," Petroamazonas said in a statement.
Ecuador also modified Enap's separate contract for the Paraiso-Biguno-Huachito block, expanding it to incorporate a nearby area where the company has discovered an estimated 8 million barrels of oil, enabling it to invest $82 million in drilling and infrastructure there.
Investment in both Block 28 and in Enap's individual contract is expected to reach $100 million in the next four years.
Ecuador produces around 550,000 barrels of oil a day and has used service contract for its oil production since 2010 instead of production sharing. Under the service contracts, it owns all of the output but pays operators a fee for every barrel pumped.
