Petroecuador Budget Up 34% to US$4.8bn in 2007
The board of Ecuador's state oil company Petroecuador has approved a budget of US$2.65bn for operations and investments in 2007, the company said in a statement.
Of the total, US$1.74bn will go on operating costs and US$912mn on investments.
Aside from Petroecuador's 2007 budget, the government will provide the company with US$2.19bn for the import of fuel derivatives.
The combined US$4.84bn planned for 2007 is 34.3% higher than last year, a Petroecuador spokesperson told BNamericas.
The company's Petroproduccion subsidiary will receive US$512mn for operations and US$234mn for investments in 2007.
Among new investments, Petroproduccion will contract four drilling towers to drill 35 new wells, of which 29 are development wells, two are exploratory and four are reinjection.
The subsidiary will also contract 12 reconditioning towers to carry out 300 well-maintenance works and execute a 3D seismic program to incorporate new reserves.
In addition, Petroproduccion will begin works on new projects such as the Panacocha field.
The tender for production, transport, water reinjection and infrastructure design works for the Panacocha field was due to be awarded March 17. The spokesperson was unable to confirm or deny whether the tender had been awarded.
Petroecuador will hold a press conference next week to provide more details regarding Petroproduccion's planned investments - including Panacocha - as well as those of its other subsidiaries, the spokesperson said.
Petroproduccion aims to stabilize production and reach an average of 185,000b/d by year-end not including block 15, according to the statement.
Production on March 19 was 170,000b/d, excluding block 15, the spokesperson said.
Petroproduccion's budget also includes US$71.5mn for operating alliances.
Petroecuador's board has budgeted US$205mn in operating costs and US$292mn in investments for UB-15, the temporary administration unit operating Petroecuador's block 15.
New investments will include drilling nine wells in order to incorporate new reserves and register production of 85,000b/d at year-end.
Output as of March 19 on the block was 85,000b/d, the spokesperson said.
However, UB-15's CEO Wilson Pastor said earlier this month the block's output would reach its lowest level of 81,000b/d in April, increasing thereafter to reach 95,000b/d in December for an annual 90,000b/d average.
Output registered roughly 100,000b/d in May 2006, when Petroecuador cancelled the block 15 contract with US oil company Occidental (NYSE: OXY).
Petroecuador's Petroindustrial subsidiary is due to receive US$166mn for operational costs and US$120mn for investments, with projects including the revamping of the Esmeraldas refinery.
Petrocomercial's operational budget in 2007 is US$227mn and it will receive US$129mn for investments.
Petrocomercial will start its LPG storage project and Cuenca-Pascuales multi-purpose pipeline project, among other things.
The national Sote pipeline will receive US$62mn for operation and US$25.2mn for investments.
Petroecuador budgeted US$16.2mn for its environmental protection department for the year.
The country's economy ministry also must provide Petroecuador with US$25mn to fulfill promises made by the previous government with Amazon towns and council as well as US$15.1mn for legal costs related to the cases against Oxy and US oil company Chevron (NYSE: CVX).
Some 30,000 residents are behind a US$1bn lawsuit against Chevron, alleging Chevron's former subsidiary Texpet dumped wastewater into estuaries, rivers and unlined pits from 1964-92.
Chevron said in a statement last year that court-appointed experts evaluating the Sacha-53 site in Ecuador's Amazonian province of Nueva Loja had found "no significant oil-related public health risks" and that remediation was "effective and in accordance with legal standards at the time."
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