Ecuador Audit Values Ex-Occidental Oil Fields at $730 Million

QUITO Mar 09, 2007 (Dow Jones Newswires)

Three Ecuadorian oil fields formerly owned by U.S. oil company Occidental Petroleum Company (OXY) are worth $730 million, according to an audit carried out on behalf of a government-appointed team managing the fields.

The Ecuadorian government took over the three fields, Block 15, Eden-Yuturi and Limoncocha, on May 15, 2006, saying the company had broken contract rules. Occidental denied the accusations and is seeking redress through a World Bank arbitration panel.

In its arbitration claim, Occidental said the oil fields were worth $1 billion.

The audit was carried out by Argentine consulting firm Levin Global LLC.

Ecuador plans to spend a total of $497 million on the three oil fields this year, Wilson Pastor, manager of the government operating unit, told reporters Friday. It will invest $292 million and a further $205 million will be spent on operating costs.

Pastor said the unit plans to tender within two weeks a new contract to audit production levels when Occidental was running the fields. Occidental said it produced around 100,000 barrels per day.

The new audit will also carry out a full review of the three fields' estimated reserves, Pastor said.

Production has dropped to around 84,000 barrels a day and the unit's goal is to keep production at around 85,000 barrels a day for the first half of the year, rising to 95,000 barrels a day in the second half before producing up to 105,000 barrels a day in 2008 and 110,000 barrels a day in 2009, according to the operating unit.

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