Ecuador is taking steps to boost the country’s production of oil after output from state-run Petroecuador declined 14% during the first half of this year compared with the same period in 2006.
According to figures from the central bank, the decreased production of crude oil, which normally accounts for 40% of Ecuador’s export earnings, has adversely affected the country’s trade balance. The budget had forecast oil revenues of some $1.456 billion for 2007, but just $273 million has been realized so far.
International oil companies including Brazil’s Petroleo Brasileiro SA (Petrobras), France’s Perenco, and China’s Andes Petroleum also have registered losses, partly attributable to strikes that have taken place in the country’s Amazonian provinces.
The decrease is also partly due to natural decline at existing oil fields and to the lack of new project development, but industry observers also cite the absence of a clear government policy for the energy sector, with the first half of 2007 marked by clashes between the energy ministry and Petroecuador.
Ecuador President Rafael Correa has responded by dismissing Alberto Acosta as energy minister and dividing the energy ministry in two, appointing Jorge Albán as the new minister for oil and mines and Alecsey Mosquera as responsible for electrification and renewable energies.
Meanwhile, in a bid to shore up its faltering production, Petroecuador subsidiary Petroproduccion last week began drilling exploratory well Drago 1 in the Amazon’s Shushufindi field.
According to official figures, Shushufindi field is the country’s largest, with output reaching 8.92 million bbl during first half 2006, or about 9% of the country’s total output.
Petroecuador said the Shushufindi drilling marks the inauguration of an intense program of exploration that Petroproduccion hopes will allow the identification and development of “indispensable” new reserves.
On July 3 Indonesia’s PT Pertamina said it would present Petroecuador an offer to revive 100 closed oil wells in the Amazon region as well as develop Oglan field in Orellana province. Pertamina said the two sides had signed a confidentiality agreement regarding the projects.
Last February Pertamina said it hoped to sign contracts for six oil and gas projects in Ecuador, saying that the projects, to be developed in cooperation with Petroecuador, were expected to produce up to 300,000 b/d of oil.
At the time, Pertamina director Sukusen Soemarinda said one of the exploration projects was offshore and the rest onshore. Sukusen said the two sides signed a strategic alliance agreement covering the exploration and rehabilitation of the old wells in August 2006.