Petroecuador seeks investments of $12,000 billion to double oil production to 804,000 barrels per day in four years.
The state oil company, Petroecuador, outlined the roadmap to double its oil production from the current 395,000 barrels per day to 804,000 barrels per day in 2025.
In 2022, Petroecuador plans to incorporate an additional 100,000 barrels per day, with an investment of $437 million.
The ambitious plan, which runs until 2025, will require $12 billion in investments for eight exploration and production, refining and transportation projects, according to Italo Cedeño, manager of Petroecuador.
The investments will be made by private companies in association with Petroecuador.
The goal of 804,000 barrels per day includes the use of 110 million cubic feet of associated gas, which is burned in 355 burners, and which will be incorporated into oil production.
The use of associated gas is also a request from the Constitutional Court, which gave Petroecuador a period of two years to stop burning associated gas in burners in the Amazon.
According to Cedeño, Ecuador has some 45 billion barrels of oil in place, but has extracted 6.5 billion barrels; that is, 14% of the total.
Among Petroecuador’s challenges is the development of three large oil projects: the East Center, the West Center and the Amistad offshore gas field.
“We can’t leave that oil in the ground, we have to get it back, now or never,” says Cedeño
Central East Megablock
The development of the megablock known as Centro Este involves associating blocks 16, owned by Repsol Ecuador, with blocks ITT (Ishpingo-Tambococha-Tiputini) and 31, both owned by Petroecuador.
The three areas are located in the northeast of the Ecuadorian Amazon and have the following production:
- About 57,000 barrels per day in the ITT block.
- About 4,000 barrels per day in block 31.
- 15,000 barrels per day in block 16.
The association of the three blocks will allow a joint production peak of 250,000 barrels per day in the next three or four years.
Part of the project is to use the production facilities of block 16 , which have a capacity to process two million barrels per day and are underutilized.
The Centro Oeste Megablock, made up of the Pungarayacu oil field, is the extra-heavy crude oil area with the largest reserves in Ecuador.
Pungarayacu covers an area of 647 square kilometers in the Amazon province of Napo.
It has been explored since the 1980s. At the end of 2008, the Canadian company Ivanhoe and Petroecuador signed a contract in which the former undertook to extract crude oil from Pungarayacu, but in the end Ivanhoe abandoned the block.
In 2018, the Gran Tierra Energy company calculated that Pungarayacu has reserves of 7.6 billion barrels on site.
With 4° and 8° degrees API, Pungarayacu oil is viscous and heavy. According to Cedeño, it could be processed in an on-site refinery to obtain synthetic gas, which is used for electricity generation.
“They have made me a proposal (a private company, NDR) to generate synthetic gas” from Pungarayacu oil, added Cedeño.
Another option is to produce light oil, using solvents, but both projects are still under analysis, Cedeño said.
The Amistad field produces 26.2 million cubic feet per day, but its potential is higher according to Petroecuador.
The state firm has identified up to six new prospects or natural gas exploration areas in the Amistad field, which is located on the Gulf Coast of Guayaquil.
The tender for the Amistad field is scheduled for the second half of 2022, with an expected investment of $500 million.
The Costa Este Megablock will require the construction of a new pipeline to link the three fields.
The pipeline would have a length of 150 kilometers and a transport capacity of 400,000 barrels per day.
Cedeño estimates that the work, which is in the conceptual development phase, will require an investment of around $400 million.
Ecuador would do better to build the refinery that was shelved years ago, and pump a bit less oil, making the country truly energy independent.
And how about using some of the current oil revenue, at record prices, instead of inviting so much outside investment?