Ecuador hopes to hold at least four auctions in 2022 to award oil blocks and the operation of Esmeraldas, its largest refinery, to private companies as it seeks to pull in billions of dollars in investments, Energy Minister Juan Carlos Bermeo said on Friday.
The blocks up for grabs are currently controlled by state-run oil company Petroecuador, but the government of President Guillermo Lasso hopes to generate $19 billion in investments and boost oil production to 1 million barrels per day (bpd) by the end of his term in 2025.
The government plans to hold an auction for the offshore Amistad field, located in the Gulf of Guayaquil, where the successful bidder will assume the investment risk for developing and producing gas, the minister said.
Similarly, it hopes to award the Sacha field – one of Ecuador’s biggest and which has current daily production of 64,000 bpd – to interested companies.
“The Sacha field has been producing for more than 40 years, with infrastructure that needs investment the government currently cannot give,” Bermeo said, estimating that developing the field would need $2.8 billion in investments.
The new oil contracts will allow companies to take split profits with the government, in order to spark interest in the private sector.
Previous contracts simply paid companies for supplying operating services.
The government hopes to attract $2.7 billion in investments for the Esmeraldas refinery, which has a capacity to process 110,000 barrels of oil a day (bpd).
“We have everything ready … we have the contract model ready and we can hopefully launch this process in December this year,” the minister said.
Another oil bidding round includes blocks in the Amazon which have high potential but face strong opposition from local indigenous communities.
Ecuador currently produces around 485,000 bpd, mostly from Petroecuador.