Amistad gas field will go to tender and is expected to generate investments of $ 500 million

The Ministry of Energy and Non-Renewable Natural Resources announced the last day of the Ecuador Open for Business meeting that it will put out to tender the Campo Amistad (natural gas block) and two more exploration blocks in the same area (39 and 49) through a round off shore; this as part of the hydrocarbon investment portfolio. This decision represents a radical change of position of the current Ministry of Energy compared to that of the previous regime, when René Ortiz was Minister, on the possibilities of the field. Ortiz assured that there was no more gas and that it was in full decline.

Thus, the Minister of Energy, Juan Carlos Bermeo, informed on the day of the event that “another bidding process will be the off shore for the development of the Amistad field. We have geological and production information, which is concrete content for this important project ”.

P1 Proved Reserves, according to a July 2021 study, are 149,113 million cubic feet. These are certified by the Ryder Scott Company and represent more than 25 million barrels of oil equivalent in gas (MMBEP). Although there are 17 drilled wells, there are only 5 in production that generate 26.22 million cubic feet of gas per day.

According to the ministry, this tender is expected to generate an investment of approximately $ 500 million, which would be focused on promoting the Amistad Field. The tender for three blocks will generate 500 direct and indirect jobs, says the ministry.

It is that until a few months ago, Campo Amistad, which could be a generator of importing local natural gas production, did not seem to be on the ministry’s radar. However, the interest generated from various companies was a sign that this space does have potential.

Effectively, last August 21, the Canacol company, With headquarters in Canada and several operations in Colombia, it sent a letter addressed to Minister Bermeo and Petroecuador’s manager, Pablo Luna, in which it explains that it is interested in acquiring participation and operation of gas fields in Ecuador and other countries. They assured that they are still interested in the potential and “They would be very motivated to participate in a future bidding round, under the participation contract.” Other companies such as Sycar and Gasvesubio Export have also shown interest.

Jorge Luis Hidalgo, manager of Green Power, a company interested in establishing a local gas liquefaction plant, said that the announcement of putting out to tender the round offshore from Campo Amistad has left them a very positive feeling. He vowed that national gas production be strengthened and that imports be complementary.

“We hope that the bidding of the round offshore come out soon to match the need for gas from thermoelectric plants as well as other applications, ”he said.

The executive said that it is important to look at our neighboring countries. It turns out that Colombia produces 1,065 million cubic feet per day (mmpcd), Peru 1,600 mmpcd and Ecuador only 26 mmpcd. “Our country is not an island and it is evident that we have neglected to take advantage of our resources, because today we produce less than 2% of what our neighbors produce,” he said.

For Hidalgo, there is no oil country in the world that only has oil and not natural gas. In this sense, it highlights the concepts discussed at COP26, including energy security.

He recalled that the United Kingdom neglected its national production of natural gas, now it depends on Russia since that country imposes the world price of natural gas. Ecuador, meanwhile, is highly dependent on fuel imports (72%), with LPG being the most important hydrocarbon with 86%, in 2021 there will be about $ 4,000 million in fuel imports, including $ 1,000 million in imports of LPG.

Minister Bermeo also indicated that Ecuador plans to raise $ 19,000 million until 2025 through the launching of seven projects included in the investment portfolio of the hydrocarbon sector.

The seven projects offered are five bidding rounds (in one of them the Amistad Field is launched for bidding) and two refineries.

Thus, the other rounds are:

1. The XIII Intracampos II Round, which tenders six blocks that plan to attract an approximate investment of $ 731 million in Capex and $ 1,320 million in Opex).
2. La XIV Ronda Intracampos III foresees a private investment of $ 1 billion for the commissioning of six blocks.
3. In the XVI Round Block 60 Sacha estimates an investment of $ 2,887 million, with a participation contract.
4. The XVII Bidding Round foresees the development of fields in the Ecuadorian Amazon to attract an approximate investment of $ 4.75 billion. The bidding process is of five blocks.
5. The Esmeraldas State Refinery will have a figure of exceptional delegation to private initiative, which would represent $ 2,700 million of private investment; and the High Conversion Refinery, what is a long-term project and in which the construction of a refining complex is foreseen that will attract a private investment of approximately $ 4,500 million. (I)