The company Petrolia Ecuador SA announced that it has presented on November 25, 2022, before the Ministry of Energy and Mines, the notification of ‘Controversy and start of direct negotiations under the Modifying Contracts to Contracts for the Provision of Services for the Exploration and Exploitation of Petroleum in the bblocks 16 and 67 in the Ecuadorian East”. According to the company, the controversy arises from a series of contractual breaches by the Ecuadorian State, among which would be:
- Failure to pay the amounts owed based on the application of the correction factor established in the amending contracts.
- Abrupt and arbitrary interruption of the process of renegotiation of the term and change of modality of the modifying contracts.
“The breaches of the Ecuadorian State represent a violation of legitimate rights and guarantees, in addition to the breach of legal security; which has caused serious damage to blocks 16 and 67, to Petrolia Ecuador SA and its shareholders”, indicates the company.
The problem arose when Respol, which was in charge of blocks 16 and 67, decided to sell its shares abroad to the company New Stratus (now Petrolia). This a few months after the end of Repsol’s contract with Ecuador, which expires next December 31 and which legally allows the country to reverse the assets and reserves in favor of the country. This could mean, according to Assemblyman Fernando Villavicencio, “some $2,000 million in benefits for the State.”
In October 2020, The Ministry of Energy and Non-Renewable Natural Resources denied, through Minister René Ortiz, the request submitted by Repsol that sought to transfer rights and obligations in blocks 16 and 67 (Tivacuno) to the Canadian New Stratus Energy. The ministry pointed out that after carrying out a legal analysis, “technical and economic aspects were evidenced that would not ensure the continuity of the operations of said fields.”
However, after a little more than a year, in November 2021, the Minister of Energy, Juan Carlos Bermeo, already in the government of Guillermo Lasso, authorized the sale in Spain of the shares between Respol and New Stratus Energy. As the minister clarified at that time, this did not mean a change of operator, and he pointed out that the ministry requested that the change not represent any type of job instability for current Repsol collaborators in the country.
With the arrival of Minister Fernando Santos, ministry officials sought to enter the fields to proceed with the reversal issue, but Petrolia opposed it, indicating that his proposal for contract expansion and migration should be heard.
During these months the doubt has been present as to whether or not a ministerial agreement was needed for the change of shares. Petrolia’s position was that it was not required, because the operation was abroad. But a few days ago, the Ministry of Energy made a pronouncement that it gave Petrolia ten days to present its credentials in the technical, operational and economic aspects, so that this State portfolio decides whether or not to proceed. for the sale of shares. This is because it considers that the operator would have been changed and in this case the approval and issuance of a decree by the ministry is required.
This pronouncement would have been rejected by the company, since in the current statement it talks about the controversy. Petrolia has said that it has always acted in accordance with the law and in a transparent manner, seeking to invest risk capital, generating resources, employment and dynamism for the main benefit of the country.
The general attorney of Petrolia Ecuador SA, Ramiro Páez, stated that they hope to start direct negotiations immediately with the Ecuadorian authorities, as established in the contracts. “As an Ecuadorian, I am concerned that arbitrary actions may be taken to the detriment of the Ecuadorian State. I am sure that the Minister of Energy and Mines, the State Attorney General, and particularly, President Guillermo Lasso will know how to correct these impasses, to find a solution that avoids a new international conflict, which damages the image of Ecuador ” , said.
Petrolia Ecuador indicated that it has repeatedly expressed to the authorities of the sector its willingness to dialogue to reach an amicable resolution of the conflicts that originate from these non-observances of the Ecuadorian State. However, if it is not attended to, he has already warned that he will appeal to all the necessary legal instances to ensure that his legitimate rights are respected.
Meanwhile, on November 28, 2022, members of the Waorani nationality of Ecuador approached the vicinity of the Ministry of Energy and Mines to hold a sit-in that seeks to support the extension of the contracts for blocks 16 and 67, whose current operator is Petrolia Ecuador.
According to information provided by Petrolia, the concern of the communities originates from the neglect in which they may find themselves immersed after the termination of the Petrolia contract with the Ecuadorian State.
It is not the first time that this community supports Petrolia, although in 2020 they opposed the sale of shares to New Stratus. Hilberto Nekimo, president of the Waorani (Nawe) nationality, publicly asked him, Several weeks ago, the minister was asked to extend the block 16 contract. Nekimo said that for 28 years work has been done on four axes: health, development, education and infrastructure, and protecting the environment. And that his community has managed to create service companies and catering who can collaborate with the company. (YO)
Source: Eluniverso
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