Petroecuador Pledges US$762 Million in Investments

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Petroecuador (Quito, Ecuador) announced that US$762 million will be invested in the drilling and conditioning of oil wells and infrastructure enhancements. As part of these developments, the company forecasts an output increase of 44 million barrels in the next decade, equivalent to roughly 12,000 barrels of oil per day (BBL/d).

Fields being enhanced include Shuhufindi-Aguarico, Pucuna and Lago Agrio. Petroecuador expects these developments to generate US$2.5 billion in oil production for the state in a decade.

The investments were announced following the renegotiation of the company's service contracts. Petroecuador produces nearly 80% of Ecuador's oil, averaging 372,000 BBL/d from January to July, consistent with September's volumes.

In July, however, the company was forced to shut down most of its production following the closure of the SOTE and OCP pipelines, the nation's main transport systems, due to river erosion. The disruptions lasted for about 20 days, leading to a sharp drop in Ecuador's oil production and exports.

Petroecuador's output is expected to be impacted in the next few years with the closure of the Ishpingo-Tambococha-Tiputini (ITT) block, one of Ecuador's largest oil assets. Any new production additions seeks to help offset the ITT losses.

In August 2023, Ecuadorians voted in favor of closing the ITT block to protect the Amazon and local indigenous communities. In response, Petroecuador initiated the phased shutdown of the block's oil wells in August 2024, a process that will span five years and five months and ultimately decommission all 247 wells at the asset.

From January to July, the ITT block produced 46,400 BBL/d, down from 58,200 BBL/d a year earlier, a 20.3% decrease.

The timeline for the closure of the block has led to protests by communities that claim a delay in respecting the agreements reached.

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