Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Nov. 5 -- Rio Napo, a 70-30 joint venture of Ecuador's state oil company Petroecuador and Venezuela’s Petroleos de Venezuela SA (PDVSA), has begun operating Sacha oil field in Ecuador's Amazon.
Marco Nogera, Rio Napo’s manager of planning, said the firm plans to reach output of 70,000 b/d of oil by 2014-15—an increase of 40% over the current 49,780 b/d—or about 10% of Ecuador’s total oil production. Sacha field holds 491 million bbl of oil reserves.
According to Nogera, the JV plans to invest $621 million in exploration and production activities at Sacha over the next decade, with about 60% of the investment coming in the next 5 years.
In September Rio Napo signed a service contract with Petroproduccion, a Petroecuador subsidiary, for Sacha field. PDVSA said the contact was to “manage, increase production at, develop, optimize, integrally improve, and exploit” the Sacha site.
Analyst BMI said Sacha is “one of the country's largest producing fields, but insufficient investment has meant that, as is the case with several other fields operated by Petroecuador, it has yet to reach its full potential.”
BMI added that the Rio Napo JV is one of a series of accords reached between Ecuador and Venezuela since President Rafael Correa took power, in line with the strategy of the Venezuelan leader Hugo Chavez of offering “special treatment” to his leftist allies in the region.
In addition to Venezuela, Ecuador last month also signed an E&P contract for its Oglan field with a joint company of Petroecuador and China Petroleum & Chemical Corp (Sinopec).
With the agreement, Sinopec joins a handful Chinese state oil companies that have positioned themselves in the Ecuadorian market as partners of Petroecuador, including China National Petroleum Corp., Andes Petroleum, Petroriental, Sinopec, and CPEB Changqing Petroleum.
Petroecuador also started talks with Angola's Sonangol, which is interested in Blocks 28 and 29 in the Amazon region as well as offshore Block 42. In April Petroecuador and Sonangol signed an agreement to cooperate in several blocks in Ecuador.
Contact Eric Watkins at [email protected].
