CAPITAL: Quito
MONETARY UNIT: Sucre
REFINING CAPACITY: 176,000 b/cd
PRODUCTION: 383,000 b/d
OIL RESERVES: 2.1 billion bbl
GAS RESERVES: 3,670 bcf
Like many other producers and producing countries, Petroecuador was facing a budgetary dilemma with low oil prices.
Ecuador`s exports were fetching well below $10/bbl on the U.S. Gulf and West coasts late in the year. Each dollar decline represented an $80 million/year drop in revenues.
Several foreign oil companies nearing field production start-ups criticized Ecuador for cutting their production quotas to make room in the Trans-Ecuadoran pipeline for Petroecuador`s increased output. Petroecuador planned to inject drag-reduction agents into the pipeline.
Upstream developments
Petroecuador sought bids to operate 10 oil fields in the Oriente region. It wanted to boost the fields` production, then averaging 10,000 b/d. The fields are Bermejo, Chanangue, Charapa, Pena Blanca, Pacay, Palanca-Yuca Sur, Pindo, Puma, Singue, and Tiguino.
Oryx cut 110 ft of net pay in one of three zones found by its Yuralpa discovery well on Oriente Block 21. Two more wells were needed to establish commerciality. The well hit oil-bearing sands in three zones at 6,400-7,400 ft.
Late in the year Vintage Petroleum purchased Elf`s Ecuadoran subsidiary for $26.5 million. Main assets were 40% working interest in Oriente Block 14 and 30% in Block 17 plus $7.2 million working capital. The properties produced a restricted, gross 3,000 b/d of oil.
Transportation
Expansion of Ecuador`s oil pipeline capacity seemed at hand after years of delay for political considerations.
The government in late 1998 welcomed pipeline construction plans by ARCO, City Investing, Occidental, Oryx, and YPF, which are developing 16-22° gravity crudes oil in Ecuador`s Oriente jungle. A feasibility study was to start in mid-1999.
Expansion of the existing Lago Agrio-Balao trunk export line to accommodate heavy crudes would have resulted in a pipeline blend of 24.5° gravity. Original gravity was 28.5°.
