Ecuador expects its oil output to reach 550,000 barrels per day (bpd) by the end of 2025 as it grants foreign producers contract extensions that had been on hold, the energy minister said on Wednesday.
Ecuador’s production has slid in recent years due to instability, lack of energy company interest in the Andean country’s offered oil and gas areas and frequent contract changes. The country has been forced to renegotiate oil-for-debt deals.
Current output is around 485,000 bpd, below a peak of some 560,000 bpd a decade ago.
The government of President Daniel Noboa, who took office late last year, is re-launching offers for areas the previous administration failed to allocate, including the promising Amistad gas field whose output is needed for power generation, under a production sharing model.
“Gas is an energy transition fuel, so we think it is key,” Minister Andrea Arrobo told Reuters on the sidelines of the CERAWEeek by S&P energy conference in Houston.
Production sharing contracts are what prior administrations in Ecuador have tried and failed to negotiate in recent years. This government is also looking at modernizing the model to tighten community commitments, secure increased productivity, lower the carbon footprint and remove gas flaring, Arrobo said.
This week, the Noboa government signed an oil contract extension that was on hold with Andes Petroleum, a consortium including China National Petroleum Corp. It plans to soon sign a similar one with ENAP Sipetrol, a unit of Chile’s ENAP, Arrobo said.
At the key ITT field cluster, the government formed a committee to complete by August a plan to abandon the fields following a referendum where most people voted against the development of the environmentally sensitive area. The shutdown could cost as much as $1.3 billion, Arrobo said.
(Reporting by Marianna Parraga; Editing by David Gregorio)