QUITO Nov 15 Ecuador's state-run oil firms
Petroecuador and Petroamazonas are close to merging their
upstream operations, which should let the OPEC-member country
increase output in the future, energy officials said on
The merger, announced in October 2011, will have
Petroamazonas in charge of all upstream operations, including
the six blocks (fields) it already runs as well as eight blocks
operated by Petroecuador, which will become the state's
downstream oil company.
Ecuador's state-run companies produce about 370,000 barrels
per day (bpd) or 73 percent of the country's total output, which
currently stands at 509,000 bpd.
Petroamazonas' manager Oswaldo Madrid said that a decree
calling for the official merger would come into effect shortly.
"Since we've already taken the necessary steps we're
100-percent ready for the transfer of operations that will
happen in the next few days," Madrid told reporters.
He said Petroamazonas, which controls assets seized from
Occidental Petroleum in 2006, is studying how to
optimize production in Petroecuador's fields.
"Production in the fields that will be passed on to
Petroamazonas can be improved ... we'll see the increase in the
second or third year," said deputy oil minister Ramiro Cazar,
adding the government sees output rising to 546,000 bpd in 2014.
Petroamazonas will also take charge of Petroecuador's stake
in Rio Napo, a joint venture with Venezuela's state-run company
PDVSA, that is currently producing 65,000 bpd.
Meanwhile, Petroecuador will be in charge of the upstream
sector, which includes a key oil pipeline and three refineries,
as well as the $12.5 billion Pacifico refinery project -- a
joint venture with PDVSA.
Petroecuador head Marco Calvopina said that the two
companies have invested around $500 million in the refinery
project and that talks with the Chinese government over
financing have advanced substantially.
However, he said Petroecuador is also in talks with a German
company and with South Korea over financing.
In 2010 leftist President Rafael Correa, an ally of
Venezuela's socialist President Hugo Chavez, asked oil companies
to sign less profitable service contracts or leave the country.
Since then, foreign oil companies have not invested in
exploration or to increase production, but investments made in
state-run oil fields have allowed Ecuador to increase output
slightly since 2010.
Ecuador is OPEC's smallest member and it expects average oil
output to rise to 530,000 bpd in 2013, up from a target of
510,000 bpd in 2012.
Higher crude prices have allowed Correa to hike social
spending in recent years, which in turn has boosted his
popularity among the country's poor majority ahead of a
presidential election scheduled for February 2013.