CGC to Bid on Auca Field in Ecuador

Argentine oil company Compania General de Combustibles (CGC) is planning to bid on a contract to boost oil production on Ecuadorian state oil company Petroecuador's Auca block in a tender to be launched by the energy ministry in the next few days, a company spokesperson told BNamericas.

Some companies, including Canada's Encana, have been discouraged by the terms of the tender, which require the winning bidder to pay 35% royalties for incremental production on top of the 12.5% charged normally. However, the ministry is planning to eliminate a signing bonus that companies normally have to pay in a bid to attract more interest, the spokesperson said.

The energy ministry had planned to publish bidding rules last week, but delayed doing so due to last minute modifications, and reportedly plans to call for bids by Friday (October 31).

The tender is for association contracts to increase production on the Shushufindi, Auca, Lago Agrio and Culebra-Yulebra fields, which have combined reserves of about 850 million barrels.

CGC's Ecuadorian subsidiary CGC Ecuador has the exploration concession for Ecuador's Pastaza block, also known as Block 23, but halted exploration activities earlier this year when indigenous groups disrupted work.

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