Official: Ecuador to invest $638 million in oil contracts extensions

Eduardo Racines, the Deputy Minister of Hydrocarbons in Ecuador, said that the government expects to receive over $638 millions this year from private oil companies to increase national production.

Ecuador has been in negotiations with private companies to extend 20-year contracts by up to 10 years, while setting new production and investment targets.

Racines said in an interview that "as a result?of these contracts?at least 638 million dollars will be invested this year". In an interview, Racines said:

Racines said that five additional extensions are expected to be signed this year with China's Andes Petroleum.

Andean nation expects to produce 465,000 barrels of oil per day in 2026, up?29,000 barrels a day over 2025. The state-owned SOTE pipe ruptured last year due to regressive erosion of the Amazon rainforest.

Racines stated that production will continue to increase through 2028. This is supported by the upcoming auctions for oil and natural gas blocks.

Petroecuador, the state-owned oil company, is planning to hold an international tender for 15 marginal blocks by year's end.

The government also hopes to conclude a direct negotiation with a foreign state-owned firm to operate 11 offshore blocks between the provinces of Esmeraldas & Guayas. He added that if no agreement can be reached, an international tender will be held next year.

The government also prioritizes legal reforms to allow private companies access to?producing fields, and the expediting of five pending environmental permits. The deputy minister stated that these licenses were crucial to the exploration and exploitation effort aimed at producing 130,000 bpd. (Reporting from Alexandra Valencia).

(source: Reuters)