Ecuador Receives 14 Bids For Enhanced Oil Recovery Contracts

Ecuador's state-run company Petroamazonas has received 14 bids from seven companies for enhanced oil recovery works at six groups of oilfields in the Amazon region.

The company said that bids, including those from Halliburton (HAL), Schlumberger (SLB) and Argentina's YPF are for a total of 17 oilfields.

Ecuador, the smallest member of the Organization of the Petroleum Exporting Countries, or OPEC, produces an average of about 540,000 barrels of crude oil a day.

About 75% of the country's crude output comes from Petroamazonas and Rio Napo, a joint venture of Petroamazonas and state-owned Petroleos de Venezuela SA, or PdVSA.

Currently, more than 90% of the Petroamazonas fields are mature and several of them have already produced most of their reserves.

Petroamazonas wants to use enhance and secondary oil recovery techniques with the aim to increase its oil output and reserves.

According to Petroamazonas, companies that are awarded contracts will be paid a fee per barrel. Contractors will receive a payment for each incremental barrel of production.

The government expects to improve the recovery factor at Petroamazonas' oil fields by three or four percentage points. The current recovery factor is about 32%.

The company is also looking to attract foreign investment from oil companies and operators that have high technology and resources and want to invest in risk projects in Ecuador, either individually or in association with Petroamazonas.

The government has said that China National Petroleum Corp., or CNPC, China's largest oil and gas producer, is interested in the Sacha and Auca oil fields as well as block 31 and block 20.

(wsj.com Feb 13, 2014)