Correa Defends Alliance Between Petroecuador and PDVSA

QUITO – President Rafael Correa defended the strategic alliance between Petroecuador and Venezuelan state-owned oil giant PDVSA for the operation of the Amazon’s Sacha field, one of Ecuador’s largest oil fields.

Correa criticized politicians who oppose the alliance, arguing that Petroecuador holds a 70 percent stake in the venture while PDVSA has only a 30 percent interest.

The state-owned companies formed the Rio Napo consortium, which will be a “service provider” in the Sacha field, Correa said on Saturday.

Rio Napo will only receive reimbursement for production costs from the 50,000 barrels per day (bpd) currently produced at Sacha, the president said, adding that the benefits from the deal would come from increased production due to new investment by the consortium.

The alliance will make it possible to increase Sacha’s output by some 20,000 bpd, with Rio Napo barely receiving $1 for each additional barrel produced and Petroecuador getting 70 cents out of each of those dollars, Correa said.

Ecuador is also receiving environmental protection technology in the deal, the president said.

An average of 48 oil spills used to occur annually in the Ecuadorian Amazon, but this year there have been only three spills, Correa said.

Ecuador produces some 480,000 bpd of crude, with Petroecuador accounting for some 60 percent of output and about a dozen private companies the rest.

Oil is Ecuador’s main export product and revenues from its sale finance about 35 percent of government spending.