Background on Petroecuador and the Significance of the Agreement
Petroecuador, Ecuador’s state-owned oil company, has been seeking a strategic partner and private investment to boost natural gas production in the country over the past few years, without success. This recent agreement with China’s CNPC marks a significant step towards achieving that goal.
Details of the Agreement
Petroecuador announced on Monday that it has signed a services contract with China National Petroleum Corporation (CNPC) for reconditioning work on offshore wells, with an investment of $78 million. The aim is to increase natural gas production in Ecuador.
Corporación Nacional de Petróleo de China (CNPC) will carry out these works and investment in the Amistad field, located in Guayaquil’s Gulf. The current production is approximately 20 million cubic feet per day.
According to Petroecuador, “After the contract was signed between both parties for $78 million, the mobilization of the jack-up platform from China will begin in the coming days.” The works are set to commence in October, marking the return of such operations at Ecuador’s sole offshore base after more than a decade.
Production Goals and Additional Projects
Petroecuador anticipates that the Amistad field’s production will surpass 40 million cubic feet per day, though no specific timeline has been provided for reaching this target.
In the same block, Petroecuador is also executing reconditioning work on closed wells, which will add an additional 5 million cubic feet of natural gas per day.
Government’s Energy Strategy
The Ecuadorian government plans to utilize the country’s natural gas production to supply the thermoelectric power plant, Termogas Machala, and meet the anticipated dry season in September of this year.
Key Questions and Answers
- Who is Petroecuador? Petroecuador is Ecuador’s state-owned oil company, responsible for the exploration, production, refining, and commercialization of hydrocarbons in the country.
- Why is this agreement significant? This agreement with CNPC represents Petroecuador’s first successful step towards securing a strategic partnership and private investment to increase natural gas production, which has been a challenge for the company in recent years.
- What are the production goals? Petroecuador aims to double natural gas production in the Amistad field, surpassing 40 million cubic feet per day. They are also working on additional projects to add 5 million cubic feet of natural gas per day.
- How will this impact Ecuador’s energy sector? The increased natural gas production will help supply the Termogas Machala power plant and ensure energy security during periods of low rainfall, such as the anticipated dry season in September.
