QUITO Sep 8, 2006 (Dow Jones Newswires)
Ecuador plans to drill 27 wells this year and next to maintain oil production at around 100,000 barrels a day in the former oil fields of Occidental Petroleum Corp. (OXY), the director of the seized fields said Friday.
The government seized Block 15, Eden-Yuturi and the Limoncocha fields in May, claiming Occidental had broken the terms of its operating contract.
Occidental denies the accusations and has taken the case to the World Bank's International Center for Settlement of Investment Disputes.
At a press conference Friday, Carlos Blum, the director of the seized fields, said five wells will be drilled between October and December and the other 22 in 2007.
Current production is about 96,000 b/d, a decline of some 4.0% in relation to production before the government took over the wells.
Blum said the natural decline in the fields is some 2.92% a month, or an average of 35% a year.
Since the government took over the fields in August, it has obtained revenues of some $385 million.
Petroecuador has started the tender process for two drilling rigs, but of the six companies invited to take part, only two decided to do so.
The announcement of the winner of the process will take place next week if the technical and financial standards are met.
Congress late Thursday approved establishing a trust to manage the funds from the former oil fields of Occidental.
Official estimates are that the fields will generate some $620 million this year and some $1.45 billion next year.
Copyright (c) 2006 Dow Jones & Company, Inc.
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