Petroecuador Seeks to Cancel Contract with U.S. firm

QUITO – Ecuador’s state-owned energy company has called on the Natural Resources Ministry to cancel U.S.-based Energy Development Corporation’s gas exploration and production contract, saying the company has not complied with its annual investment plan.

A ministry spokesperson told Efe that Petroecuador wants the contract revoked because it says EDC has failed to make agreed-upon investments in Campo Amistad, a gas field in the Gulf of Guayaquil.

Minister Germanico Pinto has received Petroecuador’s request but has decided not to issue a statement until completion of a review process, which can take up to 60 days, the spokesperson said without providing further details.

EDC signed a contract in July 1996 to operate the coastal Block 3, which includes the Amistad field; it went into effect for a period of 25 years beginning in 2001, when the company began gas production activities.

The National Hydrocarbons Directorate, which oversees oil and gas operations in Ecuador, says EDC produces 28.4 million cubic feet of natural gas per day from a reserve estimated to contain 200 billion cubic feet of gas.

Ecuador’s leftist government instituted so-called “coactiva” proceedings against Anglo-French oil company Perenco last year to enforce payment of some $327 million in alleged unpaid debt.

Ecuador in 2006 also decided to cancel a contract with Occidental Petroleum for a block in the Amazon region, accusing the California-based firm of transferring 40 percent of its stake to Canada’s Encana without authorization. EFE


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