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Friday, August 14, 2009

Spain's Repsol sees 2009 Ecuador oil output drop

By Eduardo Garcia

QUITO, Aug 13 (Reuters) - Spain's Repsol-YPF (REP.MC) sees its Ecuadorean oil production declining by 9,000 barrels a day (bpd) in 2009 to about 44,000 bpd but says it plans further investments in the OPEC member country.

"Fifty-three thousand bpd was the average production for last year," Carlos Guerrero, the company's Ecuadorean production manager, told reporters on Thursday. "This year we're estimating production at 44,000 bpd."

He told reporters the decline was due to the aging of fields operated by Repsol as the production manager of an investment consortium including other companies.

"One should take into account the natural decline of our fields is around 20 percent. That is to say, in a natural manner, our production is falling between 800 to 1,000 bpd per month."

In a report handed to reporters, Repsol said its average 2008 output was 53,917 bpd.

In 2009, Repsol is investing more than $60 million in its production operations in Ecuador, he said. Depending on circumstances, it plans to drill three or four new wells this year, Guerrero said.

Next year, in line with a current agreement with the government, Repsol plans to invest more than $120 million and drill 20 wells, he said.

But he added that the 2010 investment plans could change depending on the terms of a new contract under negotiation with the government. He said Repsol expects to sign the new contract by March 10, 2010.

Ecuador is negotiating with foreign oil companies for new contracts. It is pressing companies to surrender their profit-sharing arrangements with the government in exchange for flat-free contracts.

Ecuador's total current oil output is about 486,000 bpd, a substantial share of which is pumped by foreign oil companies.

Repsol pumps oil in Ecuador as part of an investment consortium that includes China's Sinochem.

Ecuador's Vice President Lenin Moreno told Reuters last week that the government would take charge of foreign oil companies' operations if the companies fail to raise output, stressing the administration's hard-line as it seeks to renegotiate contracts.

Since taking office in 2007, Ecuadorean President Rafael Correa, a leftist ally of Venezuelan President Hugo Chavez, has pressed to boost state revenue from the oil sector but has repeatedly said he would not nationalize.

Under a new constitution, Correa has widened authority over key "strategic" sectors such as mining and oil.

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