Workers, politicians and experts agree that it would not be a good business for the Ecuadorian State to provide a very efficient field with light crude.
The announcement that the field Sacha would be delegated to private investment through a participation contract for 24 years, which was unveiled at the Ecuador Open for Business (event that seeks to attract private investments for $ 30,000 million), brings several voices against. Oil workers, politicians and experts agree in which the field, considered the Crown Jewel of the State for being a productive field of light crude oil and in full production, It should not be handed over to the private operation, as this would generate less profitability for the State.
According to investment portfolio, it is expected to obtain firm commitments from exploration and exploitation activities (investment at the risk of the private company) for the discovery of new reserves and production that would increase the country’s oil assets. The planned investment is $ 2,887 million. As of December 2020 oil on site (POES) was calculated at 5,227 million barrels. On the other hand, the proven, probable and possible reserves are 367 million barrels, with a daily production of 65,000 barrels per day of API 26º quality.
About the topic, Roberto Salas, presidential advisor in charge of public-private partnership issues, explained that there is a need to significantly increase production and that requires incurring relevant investments. He also explained that the State must determine the best way to carry out projects using modalities that do not compromise State resources.
He clarified that private participation does not represent an asset disposal. Neither concessions nor public-private partnerships are privatization, since the assets continue to be the property of the State, he explains. For Salas, the Government is showing signs of wanting to do things in the most convenient way for the State and for the citizens.
NeverthelessAssemblyman Fernando Villavicencio (Concertación) considered that private investment should be oriented to risk projects. But Sacha is not a risky investment, but the most productive and efficient in Ecuador: “Produces a barrel at 10 dollars. It is the only field that makes others profitable, ”he said. In this sense, the assemblyman added that the government must first renegotiate the rates in the specific service contracts such as those of Auca and other fields and thus recover resources. For Villavicencio, the only field that should be 100% in the hands of Petroecuador is Sacha. Noted that The case of Auca shows that this model of contract for specific services with financing is detrimental for the country.
In addition, Miguel Robalino, oil expert, He opined that the oil fields where there are greater risks should be turned over to private investment and this is not the case of Sacha, which is a good field. He also questions the magnitude of the investment ($ 2.8 billion) that is being mentioned in the investment portfolio. Explain that according to expert calculations, $ 1,300 million to reach 100,000 a day. The field is currently between 60,000 and 64,000 barrels a day. “A field with so many benefits should remain in the hands of the State,” he says.
Meanwhile, the National Association of Workers of Energy and Petroleum Companies (Antep) rejected the possibility of handing over the field. In a statement, the organization indicated that when delivering a profitable good such as Sacha, production would have to be divided between the private sector and the State or, failing that, pay a very high rate, when until 2018, according to In the management report of the former Petroamazonas, the operating cost of this asset was around $ 3.75 per barrel.
For the workers, declarations of lack of money for investments contradict reality. Just last October 20, 2021, EP Petroecuador announced, through a press release, the start of a two-year drilling campaign to increase production. Campaign that is underway and is being carried out successfully. This is logical, given that Sacha is the most profitable field in the country, with 367.8 million barrels of reserves and investments can easily come out of its own production.
They explain that according to the latest oil income figures published in 2019, Sacha is the field that produces the most profitability per barrel for the State, with $ 56.47 per barrel of oil. On the contrary, fields with similar characteristics such as Auca, which were delivered for private initiative, yielded 47% less profit for the State, with $ 29.63 per barrel of oil.
It is not the first time that the Sacha field has been concessioned. In 2016, the former coordinating minister of Strategic Sectors in the government of Rafael Correa, Rafael Poveda, announced that the partnership with PDVSA was being liquidated, but that they were going to look for a partner to exploit the field, in a model similar to that applied with the Auca field.
At Lenín Moreno’s government again analyzed the issue. At this time the Minister of Energy, Carlos Pérez García, through Official Letter No. MERNNR-MERNNR- 2019-1047- OF, indicated to the then Minister of Economy and Finance, Richard Martínez: “As you know, Petroamazonas EP has provided several economic models on the possible monetization of the Sacha, Ishpingo and Coca-Payamino fields, the same ones that were presented for analysis. At the discretion of this government portfolio, said model does not suit the interests of the country. “
Rather, the minister was of the opinion at that time that a loan should be sought from the public company itself and the exploitation works should be carried out.
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