CNPC Takes Stake in Ecuador Oil Block

China National Petroleum Corp. has acquired a stake and operatorship of Block 11 in the Amazon region of Ecuador. The area covers 200,000 hectares and is currently operated by Lumbaqui Oil, a unit of Rompetrol of Romania.

Currently Block 11 produces approximately 1,000 barrels per day of oil but has a capacity of 10,000 barrels. The block's proven reserves total 17 million barrels.

The request to formalize the production sharing agreement between Lumbaqui Oil and CNPC was submitted to Ecuadorian authorities in late May. Ecuador's Energy Minister is expected to authorize the move early next month, after state-run oil company Petroecuador handed down a favorable report on the matter in late June. CNPC is also interested in acquiring stakes in other areas of Ecuador as well.

Ecuadorian President Lucio Gutierrez is currently on a state visit to China, where he is encouraging Chinese businesses to invest in the South American country. Gutierrez has invited Chinese investors to participate in oil licensing auctions that the Ecuadorian government is preparing. The government plans to grant concessions to explore ten areas, and construct oil pipelines and refineries.