By Mercedes Alvarado
QUITO--Ecuador's state-run company Petroamazonas has begun the
final stage of negotiations before signing contracts for enhanced
oil recovery projects at six groups of oil fields in the Amazon
region.
The state company wants to use improved oil recovery techniques
to increase production and reserves at its fields. Currently, more
than 90% of the Petroamazonas fields are mature and several of them
have already produced most of their reserves.
Petroamazonas general manager Oswaldo Madrid said in an
interview that the company expects to sign the respective contracts
next month for a total of 17 oil fields, but he declined to provide
details on the current production as well as goals for increasing
production with the new contracts.
Last year Petroamazonas invited 31 local and foreign oil
companies to submit offers for secondary and enhanced oil-recovery
projects. Petroamazonas received 14 bids from seven companies,
including Halliburton (HAL), Schlumberger (SLB) and Argentina's
YPF. Negotiations started in February.
Companies that are awarded contracts should provide financing
for the recovery works and they will receive a fee for each
incremental barrel of production.
Petroamazonas is also looking to attract foreign investment from
oil companies and operators that have advanced technology and
resources and want to invest in risk projects in Ecuador, either
individually or in association with Petroamazonas.
In 2010 the government of President Rafael Correa revamped oil
contracts with foreign companies, changing production-sharing deals
to service contracts. Since then operators are service providers
for the exploration and extraction of hydrocarbons and receive a
fee rather than sharing in profits.
Currently Ecuador produces about 550,000 barrels of crude oil
per day, of which about 80% comes from Petromazonas and Rio Napo, a
joint venture between Petroamazonas and Venezuelan state-owned
Petroleos de Venezuela S.A.
Write to Mercedes Alvaro at mercedes.alvaro@wsj.com