Petrobras to invest $1 billion in Ecuador

Brazil's state-owned Petroleo Brasileiro SA (Petrobras) and Ecuador's state oil firm Petroecuador signed a memorandum of understanding Apr. 5 to develop Ecuador's Ishpingo-Tiputini-Tambococha oil fields in the Amazon region.

Peter Howard Wertheim
OGJ Correspondent

RIO DE JANEIRO, Apr. 5 -- Brazil's state-owned Petroleo Brasileiro SA (Petrobras) and Ecuador's state oil firm Petroecuador signed a memorandum of understanding Apr. 5 to develop Ecuador's Ishpingo-Tiputini-Tambococha oil fields in the Amazon region.

This area of fields already has five discoveries with a potential output of 190,000 b/d of oil that could double after 4 years of exploration.

Brazil's President Luiz Inácio Lula da Silva said Brazil will invest $1 billion in oil and gas exploration and biofuels projects in Ecuador until 2010.

The fields, which are in Ecuador's Yasuni National Park—a UNESCO Biosphere Reserve—hold nearly 1 billion bbl of crude reserves, said Ecuador's President Rafael Correa during a visit to Brazil.

With the MOU, Petrobras joins a consortium of Chile's state-owned oil company Empresa Nacional del Petróleo (ENAP) and a unit of China's state-owned Sinopec.

They signed the MOU committing to presenting an exploration program to Ecuador in the next few months, with concrete proposals for protecting the region's highly vulnerable ecosystem.

Brazil and Ecuador also signed agreements to jointly produce biofuels and ethanol in Ecuador using Brazilian technology.

Brazil is the world's number one sugar producer and exporter, and the leading exporter of ethanol made from sugarcane. It also is the world's second-largest ethanol producer after the US, and is ramping up production of soybean-based biodiesel.

Correa said Ecuador will return as a member of OPEC, although he didn't say when. Ecuador was a member until the 1990s, when it failed to meet its export quotas.

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