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Turkey Turmoil Drags Oil Down

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While Turkey might not be…

Ecuador Spices Up Lease Auction With Mature Oilfields

Storage tanks Petroecuador

An increased number of Ecuador’s oil and gas fields will go up for auction in March, according to Oil Minister Carlos Perez, who added that mature crude fields and an offshore gas field were slated to be in the mix.

Latin American countries with largely maturing oil and gas fields are trying to make exploration and production deals as attractive as possible for fossil fuel majors with limited budgets. Mexico, Brazil, and Uruguay are due to auction leases with new framework agreements designed for the chronically bearish markets.

“Our goal is to attract investment and also look for an increase in production and reserves in the future,” Perez told Reuters in an exclusive interview. The Amistad gas field in the Guayaquil Gulf will be added to the lease auction roster by Petroamazonas in due course, he added.

Ecuador is one of the Organization of Petroleum Exporting Countries’ (OPEC) newest members, producing a small fraction of the bloc’s total output. Perez has been lobbying to allow Ecuador to increase output despite existing quotas that aim to rebalance global supply markets. The country has pledged to cut 26,000 bpd as part of the deal, so its actual contribution to the cuts is not terribly significant in the grand scheme of things. Quito began to oppose the cuts six months into the enforcement of the production restriction agreement, worrying analysts that the pact was starting to fall apart.

Since last June, OPEC has worked with Ecuador to allow a more modest level of cuts.

“Ecuador’s production is marginal in the OPEC context. It is a commitment with them to maintain OPEC’s unity. We talked about it during the OPEC secretary general’s visit (earlier this month), they are giving Ecuador flexibility,” he said.

By Zainab Calcuttawala for Oilprice.com

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