Oil Companies to Invest $1.38B in Ecuador

QUITO (Dow Jones Newswires), Apr. 8, 2011

Oil companies and consortiums operating in Ecuador under service provider contracts will invest $1.38 billion in the Andean country during the 2011 to 2025 period, the Ministry of Nonrenewable Natural Resources said Friday.

Companies investing in the oil sector include China's Andes Petroleum and PetroOriental, Italy's Eni, Spain's Repsol, and Chilean state oil and gas company Empresa Nacional del Petroleo, or Enap.

The investments will be made in 14 oil fields, with about $1.1 billion going into production while the rest will be invested in exploration. On its website, the ministry said of the total figure, 87% will be invested up to 2014.

For this year oil companies are seen investing $468 million, of which $409 million will be invested in production activities and $59 million in exploration.

In January Ecuador's government concluded almost three years of negotiations aimed at gaining more control over its natural resources and increasing its oil revenue by replacing production-sharing deals with services contracts.

The services contracts turn the companies into service providers for the exploration and extraction of hydrocarbons. Companies will receive a fee rather than sharing profits.

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