Petroecuador to Select State Oil Company to Operate Block 15

Ecuador's state oil company Petroecuador will announce the structure of a commission that will be charged with selecting a state oil company to operate block 15 on Tuesday or Wednesday, a Petroecuador spokesperson told BNamericas.

After block 15 was expropriated from US oil company Occidental (NYSE: OXY) along with Oxy's other local assets in mid-May, Petroecuador subsidiary Petroproduccion assumed operations. Ecuador's President Alfredo Palacio granted the company 30 days to reach the approximately 98,000 barrels a day (b/d) production level previously maintained by Oxy.

Petroproduccion produced 101,047b of oil on former Oxy fields on Sunday, with 73,263b coming from the Eden-Yuturi field, 9,534b from the Limoncocha field and a combined 18,250b from block 15's two fields, the spokesperson said.

Colombia's state oil company Ecopetrol, Chile's Enap, Brazil's Petrobras (NYSE: PBR) and China's Sinopec have expressed interest in operating the block, the spokesperson said, adding that Venezuela's PDVSA has not shown interest.

Ecuador expropriated Oxy's assets on the grounds that the company allegedly transferred a 40% stake in block 15 to Canadian oil firm EnCana (NYSE: ENC) in 2000 without government permission, overproduced some wells and did not comply with the block's investment plan.

Oxy responded to the seizure by filing an arbitration claim with the International Center for Settlement of Investment Disputes (ICSID).

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