Ecuador and Chile join to explore for gas in Guayaquil gulf

Mercopress, 1 August 2008

Ecuador government owned petroleum corporation Petroecuador announced this week the creation of a joint company with Chile’s counterpart, ENAP, to explore for natural gas in the Guayaquil gulf.

“The board of Petroecuador has accepted the proposal for a new joint company with ENAP”, said Mines and Petroleum minister Galo Chiriboga in Quito.

The minister added that the new joint company will “boost gas exploration in the gulf of Guayaquil”, to the southwest of Ecuador where primary surveys have indicated the possibility of significant natural gas deposits.

Petroecuador is also involved in a similar undertaking with Venezuela’s PDVSA, with the purpose of searching for gas in an adjacent area in the gulf.

Chiriboga said that ENAP and Petroecuador will be exploring for natural gas in “Block 40” of the gulf and with PDVSA in the “Block 5”.

The minister added that in both cases Petroecuador is expected to hold a majority stake, although with ENAP, “discussions are ongoing” and the percentages “still have to be agreed”.

Ecuador and Venezuela also agreed to join efforts to increase the output of the Sacha oil field from 40,000 barrels to 70,000 barrels per day.

The two countries signed a 25-year contract to form a joint venture company titled "Rio Napo" with the aim of "optimizing" the management of Sacha, said Jose Ziritt, representative of Ecuadorian President Rafael Correa.

Petroecuador will hold 70% of the new company and Venezuela's PDVSA, 30%.

Minister Chiriboga said cooperation with PDVSA was targeted to take advantage of PDVSA technological edge needed to boost the oil extraction. Sacha field, located in Ecuador's Amazonian jungle, has oil reserves of 480 million barrels.