Amistad gas field will go to tender and is expected to generate investments of $500 million

Several companies had expressed their interest in this field. In the previous Government it was mentioned that it no longer had potential.

The Ministry of Energy and Non-Renewable Natural Resources announced on the last day of the Ecuador Open for Business meeting that it will put out to tenderthe Amistad Field (natural gas block) and two more exploratory blocks in the same area (39 and 49) through a roundoff shore; this as part of the hydrocarbon investment portfolio. This decision represents a radical change in the position of the current Ministry of Energy compared to that of the previous regime, when René Ortiz was minister, regarding the possibilities of the field. Ortiz assured that there was no more gas and that it was in full decline.

Thus, the Minister of Energy, Juan Carlos Bermeo,reported on the day of the event that “another bidding process will be the roundoff shorefor the development of the Amistad field. “We have geological and production information, which is concrete content for this important project.”

The P1 Proven Reserves, according to a July 2021 study, are 149,113 million cubic feet. These are certified by Ryder Scott Company and represent more than 25 million barrels of oil equivalent (MMBEP). Although there are 17 wells drilled, there are only 5 in production that generate 26.22 million cubic feet of gas daily.

According to the ministry, this tender is expected to generate an approximate investment of $500 million, which would be focused on enhancing Campo Amistad. The tender for three blocks will generate 500 direct and indirect jobs, says the ministry.

Until a few months ago, the Amistad Field, which could be a generator of imported local natural gas production, did not seem to be on the ministry's radar. However, the interest generated from several companies was a sign that this space does have potential.

Indeed,On August 21, the company Canacol,with headquarters in Canada and several operations in Colombia, sent a letter addressed to Minister Bermeo and the manager of Petroecuador, Pablo Luna, in which it explains that it is interested in acquiring participation and operation of gas fields in Ecuador and other countries. They assured that they remain interested in the potential and“They would be very motivated to participate in a future round of bidding, under the participation contract.”Other companies such as Sycar and Gasvesubio Export have also shown interest.

Jorge Luis Hidalgo, manager of Green Power, a company interested in establishing a local gas liquefaction plant, said that the announcement of putting the round out to tenderoffshoreCampo Amistad has left them with a very positive feeling. He hoped that national gas production would be strengthened and that imports would be complementary.

“We hope that the round tenderoffshorecome out soon to coincide with the need for gas from thermoelectric plants as well as other applications,” he said.

The executive said that it is important to look at our neighboring countries. It turns out that Colombia produces 1,065 million cubic feet per day (mmcfd), Peru 1,600 mmcfd and Ecuador only 26 mmcfd. “Our country is not an island and it is evident that we have neglected to take advantage of our resources, since today we produce less than 2% of what our neighbors produce,” he said.

For Hidalgo, there is no oil country in the world that only has oil and no natural gas. In this sense, the concepts discussed at COP26 stand out, including energy security.

He recalled that the United Kingdom neglected its national production of natural gas, now it depends on Russia since that country imposes the world price of natural gas. Ecuador, meanwhile, is highly dependent on fuel imports (72%), with LPG being the hydrocarbon that imports the most with 86%, in 2021 there will be close to $4,000 million in fuel imports, including $1,000 million in fuel imports. LPG.

Minister Bermeo also indicated that Ecuador plans to raise $19,000 million until 2025 through the launch of seven projects included in the investment portfolio of the hydrocarbon sector to public bidding.

The seven projects offered are five bidding rounds (in one of them the Amistad Field is launched for bidding) and two refineries.

Thus, the other rounds are:

1. TheXIII Intrafield Round II, whichtenders six blocks that plan to attract an approximate investment of $731 million in Capex and $1,320 million in Opex).
2. The XIV Intrafields Round IIIIt foresees a private investment of $1,000 million for the implementation of six blocks.
3. In the XVI Round Block 60Sacha estimates an investment of $2,887 million, with a participation contract.
4. The XVII Bidding RoundIt foresees the development of fields in the Ecuadorian Amazon to attract an approximate investment of $4.75 billion. The bidding process is for five blocks.
5. TheEsmeraldas State Refinery will have a figure ofexceptional delegation to private initiative, which would represent $2.7 billion of private investment; and theHigh Conversion Refinery,which is a long-term project and in which the construction of a refining complex is planned that will attract private investment for approximately $4.5 billion.