Petroecuador, Petrobras Sign Strategic Alliance

Ecuador's and Brazil's respective state oil companies Petroecuador and Petrobras have signed a five-year strategic alliance agreement to develop initiatives throughout the former country's hydrocarbons chain, Ecuador's energy ministry said in a statement.

The two are most interested in storage, refining, biofuels development and E&P, a Petroecuador spokesperson told BNamericas.

Petrobras is particularly interested in E&P of the ITT (Ishpingo-Tambochocha-Tiputini) oilfields in Ecuador's north, as well as the Sur Oriente Ecuatoriano blocks, the official said.

Ecuador's President Alfredo Palacio will decide whether to carry out the E&P works with Petrobras under the strategic alliance framework or through an international tender, the spokesperson said. Petroecuador would be ready to tender the Sur Oriente Ecuatoriano blocks next year.

The ITT block has 900 million barrels of proven reserves that have been certified by France's Oil Institute (INP). Investment for the project is estimated at a minimum US$2bn.

Petrobras and Petroecuador will form a committee within the next few days that will identify and propose projects to the presidents of both companies.

Petrobras recently announced a vast increase to its January 2007-December 2011 budget, and aims to direct US$12bn toward international operations in the period.

Of the total, Petrobras will invest US$500mn in Ecuador during the five-year period, the spokesperson said, citing Petrobras' international director Nestor Cunat Cervero.

The strategic alliance agreement signed between Petrobras (NYSE: PBR) and Petroecuador will be renewed automatically for additional five-year terms.

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