Petroecuador wants to sign in April an agreement with Canada's Ivanhoe Energy to develop and exploit the Pungarayacu oil field, Petroecuador President Fernando Zurita said Friday at a press conference.
Pungarayacu has reserves of 3.0 to 4.0 billion barrels of crude of around 8 API gravity degrees, Zurita said. Zurita said Ivanhoe has special technology to transform the heavy crude into somewhat lighter grades of 23 API.
Petroecuador and Ivanhoe will sign a contract for specific services.
Petroecuador, Pungarayacu's owner, aspires to a participation of around 80% in the field's production.
The project's contract life is for 20 years and can be extended by other 10 years.
The first stage, of around a year, will be for evaluating the field and will cost $100 million.
The second stage, for ratifying results, will cost $500 million.
If one of the two stages demonstrate that the project is not feasible, the agreement will expire, Zurita said.
According to project plans, the oil production will begin in the fourth year with 30,000 barrels per day and could rise to 120,000 barrels per day.
Copyright (c) 2008 Dow Jones & Company, Inc.
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