The Ministry of Energy, through a statement, was emphatic in indicating that the claim of the New Stratus-Petrolia company, which has warned of initiating an international arbitration against Ecuador, for the non-extension and migration of the contract in the blocks 16 and 67 “is totally unfounded and devoid of validity.”
This State portfolio emphasized that “the extension of the term of an oil contract is an act of State sovereignty, which occurs whenever it suits its interests and is therefore a discretionary power of the Authority.” In any case, he vowed that the issue be resolved through dialogue.
In this way, the Ministry responded to the official announcements made by New Stratus Petrolia, last Friday, that it considers itself affected because supposedly the Government: “has decided not to comply with its legal and contractual obligation to designate the Negotiations Committee required to the extension and migration of the contracts for blocks 16 and 67″. In this sense, the Ministry says that “considering a mere expectation, that of an extension of the contractual term, as an acquired right is wrong.”
He also indicated that any extension must be requested and granted to whoever is the legitimate holder of the rights to the block. At the moment Petrolia would not be, since it has not complied with the previous steps. In the statement, the Secretary of State also indicated that there is no law or clauses in the contract that oblige it to convene a commission to analyze Petrolia’s expansion and migration proposal.
The Ministry also recalled the key moments in the process that occurred regarding the appearance of New Stratus-Petrolia, which bought Repsol shares abroad in 2020.
That year, New Stratus tried to acquire Repsol’s rights to blocks 16 and 67, in the Amazon region of Ecuador, which represent a third of them, since there are other companies that make up the consortium that owns the block. In accordance with the law, this transaction had to be approved by the Ministry of Energy and Mines. “For this, the authority had to ensure that the assignee New Stratus complied with the requirements of the Hydrocarbons Law in its article 2, that is, “demonstrate proven experience, technical and financial solvency.”
The company failed to demonstrate these requirements, so the Ministry, in Official Letter No.MERNNR-MERNNR-2020-1162-OF of December 1, 2020, denied said authorization to acquire Repsol’s assets from New Stratus.
The company insisted again in 2021 on obtaining said authorization, a process that has not been finalized since despite the requirements of this authority, it still does not present documentation that proves its experience and solvency to manage these blocks, indicates the Ministry. He also pointed out that in fact, New Stratus – Petrolia Ecuador has operated blocks 16 and 67 and has received a large amount of service fees per barrel produced.
The Ministry also indicated that the contract term for blocks 16 and 67 expires on December 31, 2022 and that in accordance with the law, upon expiration of the contract term, the area, together with all its facilities, must revert to the State, without no cost.
New Stratus, despite the fact that it had not concluded the process to obtain the ministerial agreement that would legally enable it to be the owner of the blocks, requested that a commission be appointed in order to negotiate a possible extension of the contract. “Neither in the law nor in its clauses is there an obligation for the State to appoint such a commission.”
The Government reported that in conversations with New Stratus-Petrolia Ecuador SA, it was notified of the State’s decision to exercise its right to revert these blocks, at the end of the contract term, and also of the intention to offer them again for private contracting. but through an open and transparent tender in which the best offer is the winner.
“New Stratus reacted negatively to this kind invitation from the State and insisted that the blocks be delivered to them in a non-competitive system, which is illegal and ethically unacceptable,” according to the Ministry.
Finally, the State reiterated its invitation to foreign investment, to serious and solvent companies to collaborate in its desire to increase oil production, within the legal framework and in good faith.
The Energy Ministry reiterated its Commitment to establish dialogue mechanisms that make it possible to generate consensus and decisions that benefit the country and lead to optimal development of hydrocarbon resources. (YO)
Source: Eluniverso
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