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Ecuador disputes Opec production data

Ecuador says its crude production is 27,000 b/d less than the secondary-source figure published by Opec, a disparity that determines whether Quito is complying with its Opec commitment to restrain output.

According to oil minister Carlos Perez, the country´s production is close to 509,000 b/d, compared with 536,000 b/d published by Opec from secondary sources for the month of September.

Perez says the difference should be discarded because these barrels are used to generate power at the field level and for “other activities.”

“Opec reports a higher production volume because it uses the secondary market as reference,” Perez says.

Opec separately publishes production data based on direct communications with its members. The last official figure for Ecuador is 533,000 b/d for first quarter 2017.

Perez acknowledged that Ecuador has only partially complied with its Opec quota of 522,000 b/d, although Quito has repeatedly indicated that it supports the organization´s efforts to reduce production and stabilize prices.

According to Ecuadorean oil regulator Arch and central bank data, Ecuador produced 534,400 b/d in January-September, some 12,400 b/d above its Opec quota.

Ecuador plans to submit a request to Opec for an exemption from any potential output cuts agreed in the organization’s next meeting on 30 November, but if this proposal is not successful the country will ask for a two-year license from Opec, Perez has said.

“We will make a decision that benefits our country. We must consider Ecuador’s (financial) needs,” Perez has told Argus.

Ecuador says it will boost production to 700,000 b/d by 2021 by developing an extensive heavy crude complex and opening new oil projects to the private sector.

To attract big foreign oil companies, the government is currently working to reestablish bilateral investment treaties (BIT) that were terminated under the previous government of Rafael Correa.

The campaign to increase production also features a licensing round to develop 15 small fields. On 20 September, PetroAmazonas received offers from foreign and local oil companies for the fields. Offers commit a combined $1bn investment for 10 of the fields.

Ecuador plans to sign the contracts by the end of 2017. The companies will be paid a variable fee indexed to WTI prices.

A second tender for eight oil blocks covering several fields known as Intracampos is expected to be issued by January 2018, according to Perez. Estimated total investment needed to develop these blocks is $1.2bn. Contracts would be awarded by March.

By the end of the second quarter of 2018 Ecuador will re-launch a licensing round for some 15 exploration blocks in the southeastern Amazon, close to the border with Peru. The round took place for the first time in 2013, attracting just four offers.

Intracampos and the new southeastern round will feature production-sharing agreements that were abandoned during Correa’s 10-year tenure.

The southeastern blocks “are for large and medium-size oil companies,” Perez said.

PetroAmazonas is on track to increase production by at least 20,000 b/d in 2018 from 430,000 in 2017 by developing the Ishpingo-Tambococha-Tiputini (ITT) complex, which holds an estimated 1.7-2bn bl of 14˚-15.5˚API reserves.

Tiputini currently produces 50,000 b/d. The firm is preparing to drill at Tambococha, which could start producing in 2018 and add some 60,000 b/d. By 2019 PetroAmazonas plans to launch drilling at Ishpingo.

Cash-strapped Ecuador expects an annual $2.3bn income until 2030 by tapping ITT.
Source: Argus

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