Block 15's unit is near the field along with available infrastructure, Petroecuador said in a statement. Panacocha is in Orellana province some 460km northeast of capital Quito.
The field's development will require US$150mn, of which Petroecuador has US$20mn for the initial phase. The block has proved reserves of 64.9Mb and probable reserves of more than 27Mb.
Production of 24 API grade crude is expected to begin in 2009 at close to 5,000b/d, while peak output of 22,000b/d is expected in its third year of development and second year of production.
Total output for the block's 18-year production period could reach 68.3Mb.
The government previously was mulling plans to award Panacocha development to another company in a bidding process.
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