Business & Economy

Ecuador state oil company maintains goal of finishing 2023 with output of 400,000 bpd

Quito, Jun 29 (EFE).- Ecuador’s state-owned oil company is maintaining its 400,000-barrel-per-day output target for the end of 2023, although that objective would be well out of reach if extraction activities at Block 43-ITT – an important crude-producing area in the Amazon region – are banned in an August referendum.

During a recent visit to that block in the country’s far east, Petroecuador’s exploration and production manager, Francisco Paz, said he is confident the output target can be reached with a further push at the company’s most productive fields.

Petroecuador’s output totaled 389,000 bpd on Tuesday, and its production has been trending upward since protests by indigenous communities and a nearly week-long, landslide-triggered pipeline shutdown in the year’s first half caused momentary setbacks.

A key to achieving the 400,000-bpd objective is one of the three fields that make up Block 43-ITT, Ishpingo, where Petroecuador expects to produce an additional 3,000 bpd between now and year’s end.

On Tuesday, production at that block – located within the highly biodiverse Yasuni National Park – stood at 58,000 barrels, up from its average output of around 55,000 bpd The nationwide referendum on ITT will take place on Aug. 20, coinciding with an early general election that was called for that day after President Guillermo Lasso dissolved Ecuador’s legislature ahead of an impeachment trial.

Petroecuador CEO Ramon Correa said in recent remarks to Efe that a victory by the “Yes” side in the referendum would cause the Ecuadorian state to lose $1.2 billion a year in income from crude sales.

Correa also said Block 43-ITT’s crude reserves and resources can be safely extracted for at least 20 more years.

In addition, the company’s top executive estimated that it would cost $500 million to dismantle Block 43-ITT should the referendum not go Petroecuador’s way, a task he said could not be completed in the one-year time frame the Constitutional Court set when it approved the plebiscite.

An additional $250 million in compensatory damages awards in eventual international arbitration processes would have to be paid, not including compensation commitments already acquired with indigenous communities that live in the area of influence of oil-production activities, according to Correa.

The Yasunidos environmental collective achieved its long-sought referendum on Block 43-ITT after waging a 10-year legal battle and collecting more than 757,000 signatures.

Although no spills have been reported since the block entered into operation seven years ago, the referendum’s promoters say oil activity there must be halted to protect a natural park that is home to more than 2,000 species of trees and bushes, 204 types of mammals, 610 varieties of birds, 121 different reptiles, 150 species of amphibians and more than 250 types of fish.

The oil drilling also poses a threat to uncontacted indigenous peoples such as the Tagaeri and Taromenane who live in voluntary isolation on land bordering Block 43-ITT, they say.

A victory by the “Yes” vote, however, would not affect operations at two other oil blocks – 16 and 31 – that also are located within the boundaries of the Yasuni National Park. EFE


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