Ecuador
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Petroecuador board approves emergency OCP contract

Bnamericas Published: Thursday, March 18, 2004
The board of Ecuador''s state oil company Petroecuador approved an agreement Wednesday with the OCP consortium to transport crude on the privately owned OCP pipeline after a landslide ruptured the Sote pipeline last week, Petroecuador president Pedro Espin said in a statement. Petroecuador will start transporting crude on the OCP once the government approves the contract and both companies sign the contract. Petroecuador plans to transport crude on the OCP to supply its La Libertad and Esmeraldas refineries in order to guarantee the domestic fuel supply while the Sote is being repaired. The agreement is valid until April 30 but could be extended to May 31, the statement said. Repairs on the Sote could take about one month. Under the agreement, Petroecuador will pay a preferential transport fee of US$2 a barrel plus US$0.75 or US$1.07 a barrel for the "distance factor," depending on whether the crude is received at the OCP''s Sardinas or Amazonas stations. The fee is lower than that which the current OCP users pay but much higher than the US$0.60 a barrel that Petroecuador pays on the Sote. Meanwhile, Petroecuador cut its output to 189,683b on Wednesday, down by about 8,000b from before the accident, due to lack of storage space in tanks on the Sacha field. Petroecuador''s other Amazon fields - Lago Agrio, Libertador, Shushufindi and Auca - were producing at normal volumes on Wednesday and the crude is being stored to be transported later on the OCP, the statement said.

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