Petroecuador's 2003 Production Target Slips

Ecuador's state oil company Petroecuador will miss its 2003 production goal of 218,000 barrels a day (b/d), and will be lucky to reach an average daily rate of 210,000 b/d, a spokesperson for production subsidiary Petroproduccion told BNamericas.

The reason is declining production on Petroecuador's fields and delays in awarding two contracts worth a total of US$96mn to provide nine drilling rigs, said the spokesperson, Roberto Freire. "It's difficult to reach [218,000b/d] now, because we aren't producing that much at the moment," he said. Petroproduccion produced 202,000b on November 17, he added. "This will affect the image of our company in general because it shows that we can't reach our goals," he admitted.

Petroecuador's board should award the two rig contracts this week, but even then the winning bidders will not be able to start drilling until December and will not affect the annual average production much, Freire said.

The new rigs will have more impact on Petroproduccion's 2004 production goal, which is 250,000b/d, he said, adding that contracts to boost production on four of Petroecuador's main fields will also help increase production next year.

Petroecuador is scheduled to receive bids for those contracts on January 23. However, Petroecuador launched the tender a few weeks ago and has still not sold any bid rules. Some companies are not happy with the terms of the tender, especially the energy ministry's 37% share of incremental production plus 12.5% royalties. "The hydrocarbons law exists, but some companies want a new law that provides more legal security for investors," Freire said.

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