Four Companies Interested in Ecuador's ITT Fields

France's Total, US-based ChevronTexaco, China National Petroleum Corporation (CNPC) and the China Petroleum and Chemical Corporation (Sinopec) are considering bidding on a contract to develop Ecuador's US$2.5bn-3bn ITT (Ishpingo-Tambochocha-Tiputini) fields, project manager Jaime Guerra told BNamericas.

The Tiputini area in Ecuador's northeastern Napo province covers about 200,000 hectares with reserves of some two billion barrels of 14-16 degrees API crude, about a quarter of Ecuador's total reserves. State oil company Petroecuador has been developing the project since 1995, carrying out technical, economic and environmental studies. The energy ministry plans to call for bids once preliminary reserve studies are finalized, Guerra said, adding that French research company Institut Francais du Petrole (IFP) is carrying out the studies, which should be completed within three months. The IFP will also prepare the bid rules, he said.

The energy ministry has proposed an association contract structure, "but we still don't have any instructions to launch the tender with any particular kind of contract in our hands," Guerra said. Guerra plans to present his technical opinion October 20-24 on the type of contract to the company's board, he said.

Meanwhile, Petroecuador will accept bids through October 30 for the acquisition and processing of 219km of 2D seismic studies that seek to define the Yasuni pre-prospect in the north of the Ishpingo field, according to company information. "The seismic studies show a possible structure and if it's confirmed we would start drilling in 2004," Guerra said. Because of the low grade crude, about 15 degrees API, Petroecuador would require the winning bidder to build a refinery to upgrade the crude, most of which would be destined for export, Guerra said. "Extracting crude of about 15 API is pretty difficult because the viscosity is very high," Guerra said, adding that transporting such crude would require a pipeline with heating capability. From the refinery, the concessionaire would build a 20km pipeline to transport the crude to Argentine company Petrobras Energia's neighboring Block 31, from where it would eventually link in with the Sote pipeline for shipment to the coast and export.

The project is located in the Yasuni national park in northern Ecuador, and environmentalists claim local indigenous communities could be destroyed and the park's fragile ecosystem endangered by oil drilling. However, "it's in a zone of the park where there are no indigenous communities and the environmental studies have been approved by the environment ministry," Guerra said.

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