Eric Watkins
Senior Correspondent
LOS ANGELES, May 22 -- State-owned Petroecuador plans to cut its 2008 production target to 172,000 b/d of crude oil, or some 4% less than the goal set at the first of the year.
The Ecuadorian Mining and Oil Ministry said Petroecuador had output of 170,000 b/d in 2007, with production this year now expected to grow 1%, a new target that would be below the initial goal of 180,000 b/d set for this year.
Petroecuador chief Fernando Zurita said a natural decline in production at some oil fields would prevent the state-owned company from meeting the earlier production targets.
The natural decline in output will reach 16% in some fields, or nearly double the level estimated at the start of this year, Zurita said.
Petroecuador said it did not find oil in some exploratory wells, and the six rigs expected to begin operation in January would not start working until June and July.
Besides the output from Petroecuador's fields, the government is benefiting from production of 110,000 b/d from fields operated by Occidental Petroleum, Los Angeles, until 2 years ago.
In connection with Occidental's case against Ecuador over the cancellation of its production contract, Mining and Oil Minister Galo Chiriboga planned to travel to Paris on May 20 to attend the first arbitration hearing.
In May 2006, Ecuador's energy minister ruled in favor of a request from Petroecuador and government prosecutors to cancel Occidental's contract to operate Block 15 because the firm transferred assets without informing authorities in Quito.
Occidental Petroleum responded to the cancellation of its contract by filing a $1 billion claim against Ecuador with the International Center for Settlement of Investment Disputes (OGJ, May 22, 2006, Newsletter).
Contact Eric Watkins at [email protected].