Petroecuador's Oil Blocks 16, 67 Hit Higher Production After Force Majeure

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Petroecuador said this week that its blocks 16 and 67 reached production of 10,800 barrels of oil per day (BBL/d) after being on force majeure for three months. On March 21, Petroecuador announced a force majeure on the blocks due to attacks from local communities. The energy company lifted the force majeure on July 4.

The oil blocks are located in the Orellana province, near the Amazon forest and the Brazilian border. Petroecuador started operating the blocks on January 1.

In the first half of this year, the assets were affected by local unrest, attacks and theft, according to statements shared by Petroecuador.

Now, Ecuador's energy ministry is preparing for the tender of these assets in search of private investments to revamp the blocks' production.

Throughout July, Petroecuador has had stable oil output of nearly 390,000 BBL/d while private companies were averaging about 88,000 BBL/d, according to Ecuador's energy agency. These numbers remain far from Ecuador's production goal for this year of 520,000 BBL/d, based on an interview given by the energy minister in March.

The attacks on Petroecuador's production infrastructure have not been not restricted to blocks 16 and 67. Energy assets such as Block 43, one of the largest energy complexes in the country, have also been impacted by unrest.

Ecuador's Block 43, which comprises the Ishpingo, Tambococha and Tiputini fields, is known as the ITT complex. The asset produces more than 50,000 BBL/d, and it could increase its output in the near future.

Nevertheless, its location in the Amazon forest near the Yasuni Biosphere Reserve makes this energy asset controversial. Environmental groups have opposed oil extraction at the ITT complex for years. As a result, Ecuador has scheduled a referendum for August 20, where citizens will decide if Block 43 should be shut down.

The closure of this asset could result in revenue losses of $16 billion, according to information shared by Petroecuador earlier this year.

Besides the referendum on Block 43, on August 20, Ecuador also will hold its presidential and parliamentary elections. The contest follows the dissolution of the Parliament in May by incumbent President Guillermo Lasso, who was facing the start of an impeachment proceeding.

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