QUITO�Ecuador is trumpeting recent exploration successes in its Amazon region by Perez Companc SA and Cayman Oil Co. Meanwhile, it is planning to shut in one or more of its refineries and begin importing refined products.
Ecuador has echoed Perez Companc's estimated that a recent oil discovery on Block 31 holds 500 million bbl of reserves. Ecuador Minister of Energy and Mines Pablo Teran says this and other discoveries significantly boosts the nation's crude reserves.
The Argentina-based firm made the find under a participation contract granted during the country's eighth licensing round (OGJ Online, May 18, 2000). On test, the discovery well flowed 5,000 b/d. Three zones remain to be tested, and Perez Companc will drill more wells on Block 31 over the next year.
Ecuador also says 55 million bbl of reserves of 28� and 33� gravity crude have been discovered with the Palo Azul well, also in the Amazon region. Initial production from the well, drilled in the southern portion of Block 18, is excpected to be 3,600 b/d of crude, 3,000 b/d of which will go to Ecuador's state oil company, Petroproduccion. The remaining 600 b/d will go to Cayman Oil Co., which made the discovery.
Meanwhile, Ecuador has announced plans to import oil products such as gasoline, diesel, LPG, and fuel oil. As a result, one or more of its domestic refineries�at La Libertad, Shushufindi, and Esmeralda�are expected to close.
Studies have shown that it is cheaper for Ecuador to import these products than produce them domestically. PetroEcuador is considering alternatives, however, such as refining abroad, exchanging crude for clean products, exporting the country's crude production, and buying the products it needs in the international market.