Ecuador expects to award 2 oil projects totaling US$650mn in December

Ecuador plans to award two oil projects in December involving investments of US$650mn to help state company Petroecuador increase its production.

The projects are the reactivation of 100 closed wells needing investment estimated at US$150mn, and the capture and industrialization of gas that is flared in Amazon oilfields, which will require US$500mn, Jaime Garzón, Petroecuador’s special transformation manager, told the Enaep 2022 Annual Energy and Petroleum Meeting held in Quito by Seminarium.

With the reactivation of the 100 wells, the state company's output is expected to increase by some 15,000b/d.

The wells are among around 1,000 producing up to 200b/d that were shut down when crude was trading at US$15/b to give priority to wells producing 400-1,000b/d.

The gas capture project seeks to increase the production of the Shushufindi gas plant from the current 12.4Mf3/d to about 25Mf3/d for uses such as LPG, natural gasoline and residual dry gas for power generation.

The industrialization of the gas would imply savings for the State of approximately US$400mn a year, according to the public-private investments department.

Regarding the US$2.1bn Intracampos II round, which was launched on October 6, Garzón said the contracts with the winning companies will be signed next March.

The round seeks investments for exploration and development in the Tamya, Saywa, Tetete Sur, Lumbaqui, VHR Este and VHR Oeste blocks, in the Amazon province of Sucumbíos.

At the moment, according to Garzón, there are 16 companies interested in participating.

With the award of the six blocks, it is expected to increase the country's oil production by between 18,000 and 24,000b/d.

Interested companies can now register and acquire information on the round.

Originally, Petroecuador planned to award at least a dozen projects in 2022, but various factors, including a strike led by the confederation of indigenous nationalities (Conaie), which shook the country for 18 days and during which some oil facilities were attacked, as well as management and director changes at the state oil company, caused several of the tenders to be put off until 2023.