The Minister of Energy and Mining, Fernando Santos Alvite, explains that Colombia is in the process of reselling about 400 MW to Ecuador, which is needed at least until November. Please note that other measures are being taken to prevent power shortages in the coming months. He also talks about the situation in Petroecuador and the recent resignation of its manager, Ramón Correa, in response to problems with insurance contracts signed during his administration. It also addresses unresolved issues, such as the OCP and Yasuní.

What is the electricity situation in the country, will the blackouts return or have they already been disconnected?

The situation has improved. As you know, we had problems with Colombia, but they have been clarified and are being regulated. At one point, he reduced the power supply from 400 MW to 220 MW. But now it is being regulated. As of October 12, it is already at 280 MW.

But there have been complaints from various sectors of Colombia indicating that they should not continue selling to Ecuador and fear that their reservoirs will shrink. Is this a concern?

We know that there is very good hydrology in Colombia, so the pressure to save energy themselves is reduced. We believe that we will reach November without major problems with Colombia. And we are already negotiating with some companies about the upcoming contracting of 400 MW on board or on land. And we believe that by the end of December we will have 125 MW from the Esmeraldas power plant, which is undergoing overhaul. We also believe that by the end of November we will have more gas in Amistad for Termogás Machala.

What will that figure be, will the Amistad field facilities be used for gas imports? Has the expert testimony scheduled for October 11 already been presented?

The expert has not presented the report yet, but there is another alternative: there would be this floating platform and flexible hoses that would go to Termogás Machala.

But then the use of Amistad’s gas import facilities is already ruled out?

The use of these facilities has not yet been ruled out because the report of the expert has not yet arrived, but Petroecuador is also analyzing plan B, which is a vessel with gas and flexible hoses. Either option would be available in late November.

Is the Amistad field concession process continuing?

Continue. There was a small change in the schedule, at the request of the companies themselves, but it was explained to those interested that this is a temporary solution and that gas will be imported only in the dry season. From March, there will no longer be a need, and domestic gas, which is cheaper, will always have the advantage. Companies are not worried, because they already know that this is only due to the state of emergency.

Now you say that we already have an agreement with Colombia and these other measures… Can you guarantee that there will be no disappearance?

I can only tell you that there is a well thought out plan to avoid outages and we are confident that there will be no power outages.

Minister, why is the director of Petroecuador resigning?

The resignation of Ramón Correa is a consequence of the problems of the Prosecutor’s Office and the politics of Petroecuador. Ramón Correa, a professional of prestige and respect, felt uncomfortable with this situation of raids. He explained to the Ministry that he followed the legal procedure through Sercop.

However, does this intervention by the Prosecutor’s Office set any restrictions on the issue of property coverage?

The tender for insurance is conducted by Petroecuador because it is within the framework that corresponds to the management, i.e. it does not reach the board of directors. What Ramón Correa unofficially informed us is that the current policy with Hispana has been terminated. At the request of the Comptroller’s Office, certain assets were revalued, and as a result the policy amount was increased. He said that everything was done in accordance with the requirements, but that raids were suddenly carried out due to a report to the Prosecutor’s Office. As a board of directors, we regret the separation of Ramón Correa.

Who will replace him?

A logical candidate is the most senior manager of the company, namely Reynaldo Armijos, the current director of International Trade. This Friday we have a directory in which the topic will be known.

There are several issues that remain unresolved in this Government. For example, what will happen with the Yasuní issue?

As for Yasuní, a board meeting was held last week, mainly informational, where it was indicated that the process of engaging experts for the closure of the oil infrastructure and analysis of the costs and methodology of possible dismantling by Petroecuador is underway. The committee took note of this. What the current government will leave them with is a neat technical closure plan and a report on how much it will cost. But the decision on the implementation of the mentioned plan will be up to the new government.

The decision on OCP must be made at the end of the year. How is this issue progressing?

Interested companies have not received an official request for an extension. The Argentinian company Pampa and the Chinese company Andes, which are the main shareholders, are continuing the talks and we are waiting. Delivery of OCP to the state at the end of January 2024 because there was an extension due to force majeure. However, the return commission specified in the contract continues to work. Thus, Ministry and OCP personnel travel station by station, listing the condition of the goods, since the company’s obligation is to deliver them in good condition. If there is no official request for an extension, it will go back to the state. The ball is in their court.

Will they announce a tender for collecting gas from lighters in the Amazon? This was also left inside wait…

Petroecuador already has a new tender ready. The problem was that the lighters were scattered, they made a mapping for extraction in blocks and already have a tender ready. He will do so in the coming weeks. On the other hand, the award procedure is now ready, the tender for a block of 500 MW of non-conventional renewable energy sources. We have several tax risk reports that are favorable. It will be awarded in the coming weeks.

The government is running out of steam, and the oil figures were not positive. Production is lower, goals have not been achieved…

The problem is that the lightest oil has already gone. We have more reserves, but improved recovery systems must be implemented, which requires technique and capital, and for this we must attract foreign companies. Unfortunately, due to the problem of the Constitutional Court, which did not allow the participation agreement, which was attractive for companies, we were unable to attract them. So we have fields that are declining 10% to 12% per year. In this sense, foreign investments are needed to maintain production. In any case, production was kept at 490,000 barrels per day.

My personal opinion is that the fuel import issue must be resolved. The amount we spent, $7.6 billion, is too much. What needs to be done is to continue with the refinery improvement project to produce more derivatives, and it is essential to solve the subsidy problem; a lot of fuel is wasted because targeting is not achieved. There are plans that came out of the negotiations with Conaie, but they left the negotiating table. Low fuel prices encourage smuggling. I understand that a solution could not be found, but the state cannot continue like this.