2024-05-06 17:14:37
The Ministry of Energy and Mines announced that it has completed the renegotiation of an operation contract for block 63 Tarapoa, managed by Andes Petroleum and located in the Cuyabeno canton, in the province of Sucumbíos.
The renegotiation consists of the company in charge, Andes Petroleum, making an additional investment of $163 million, while the contract extends until December 31, 2040. This would mean an average of $10 million per year.
The extension of the Block 62 contract will also generate long-term income of approximately $969 million, which represents an oil income of 77% of the items generated in the Tarapoa Block, and a total accumulated production of more than 42 million barrels ( projected figures until 2040).
The signing of the modifying contract was carried out on Tuesday, March 19, 2024, in Quito, between the Ministry of Energy and Mines, through the Vice Minister of Hydrocarbons, Silvio Daniel Torres, and the private operator Andes Petroleum (China), through its representative. , Ma Wenjie, was reported.
The main objective of the modifying contract is the drilling of 21 development wells, 1 exploratory well, 2 advanced wells, 42 well reconditioning works and additional activities in production facilities, telecommunications, industrial security, environmental security, physical security, among others.
This renegotiation is in line with what the Vice Minister of Hydrocarbons, Silvio Torres, had announced a few days ago. The official said that he is working on these contracts that would generate an investment of $700 million. The fields in question are: Tarapoa, MDC, Palandra, Eno Ron, Ocano Peña Blanca, Pindo, Gustavo Galindo (Costa). These renegotiations are already 85% complete and are expected to be concluded by the end of the first half of this year.
On the subject, Fernando Benalcázar, former president of the SPE Ecuador (Society of Petroleum Engineers), believes that “all foreign investment is necessary and welcome in Ecuador.”
He explains that the renewal of the contract guarantees additional investments in exploration, absolutely necessary in a block for its growth, and in the development and increase of production for the next 16 years.
He also considers it important to highlight that private companies have demonstrated their environmental and social commitment, which allows them to continue investing without affecting local communities. For Benalcázar, unfortunately this has not happened in the case of other oil blocks returned to the State and transferred to the public oil company Petroecuador, such as Block 16, he said.
When asked about the importance of this investment, which would represent $10 million annually, he comments that “the important thing is how and when that amount is going to be invested.”
For the expert, this investment should not be seen as an annual average, since the most important thing is what they will invest in exploration. “It has not been explored for many years. That risk of being successful can yield more production,” he comments.
On the topic of oil policy, the director of the economic publication Weekly AnalysisWalter Spurrier, comments that what is seen from the President of the Republic, Daniel Noboa Azín, in oil policy is that he is seeking to reactivate investment.
He said it in his monthly conversation that on this occasion was called: What now? Economic and political scenarios 2024-2025. Among the notable projects, for Spurrier, are the possibility of making a participation contract for the Sacha field, carrying out the Intracampos II Round and signing several modifying contracts. The concession for the construction of the high conversion train for the Esmeraldas refinery is also in sight.