Petroecuador has awarded a joint venture led by Tecpetrol International SA an incremental production contract covering Libertador and Atacapi mature fields in northern Ecuador.
Producing for 30 years, the fields are making a combined 16,000 b/d and are amenable to secondary recovery. The joint venture also includes Schlumberger Ltd., Sertecpet SA, and Canacol Energy Ltd., Calgary. The contract includes potential exploration upside.
The Tecpetrol group will spend $334 million to drill 31 development wells and rework 28 existing wells over the contract’s 15-year life. In return for the increased output, the group will receive a fixed $39.56/bbl of incremental oil produced.
Petroecuador will absorb all operating costs and continue to manage regular operations, licensing and permits, and community and government relations. The group will supervise base curve production and assist Petroecuador with potentially reducing operating expenses, splitting any success 50-50.
Besides incremental production, the contract entitles the group to additional upside potential from optimizing the fields’ existing production, implementing various secondary recovery techniques, and exploration opportunities.
Canacol noted that it has achieved success under similar risked service contract terms at Rancho Hermoso field in the Mirador formation in Colombia, hiking output 14-fold to 34,000 b/d in 3 years.