Sinopec and Petrolia to Invest $1.7bn to Boost Production Amid Opposition Claims
Alberto Araujo, Argus Media
QUITO
EnertgieNt.com 03 03 2025
Ecuador will transfer operation of its highest-producing oil field, the 74,600 b/d Sacha, to a consortium of China’s Sinopec and Canada-based Petrolia under a production-sharing contract aimed at increasing output, the energy ministry said today.
The consortium, in which Sinopec as operators hold a 60pc share and Petrolia the remainder, committed to investing $1.7bn in the next six year to reach peak production of 100,000 b/d by 2028, up by 33pc compared with current output.
State-owned Petroecuador currently operates the field in block 60 in the Orellana province in the Amazonian region.
Energy minister Ines Manzano authorized the deal through a resolution, and vice minister of hydrocarbons Guilhermo Ferreira was charged with signing the 20-year contract. Most terms have already been negotiated and final signature should not take more than a few weeks, the ministry said.
The consortium had proposed keeping from 80pc-87.5pc of production, depending on the price of WTI crude, Petrolia’s general manager Ramiro Paez previously told Argus.
If the WTI price is below $30/bl, the consortium will take 87.5pc of the production. But its production sharing will decrease on a sliding scale to a minimum of 80pc when the WTI price is $120/bl or above. Ecuador’s government will keep 80pc of profits, when taxes and other fees are taken into account, the consortium has said.
Transitioning operations from Petroecuador to Sinopec will take about six months, said Paez.
Opposing forces
Ecuador’s oil workers’ unions have rejected the plan as unconstitutional because it passes control of the field from the state-owned company, as have opposition legislators with the citizens’ revolution party that holds a majority in congress. The deal will cost Ecuador’s government $8bn, the party claims. They also complained that the government announced the decision at the start of a holiday weekend.
Manzano defended the deal as constitutional as the hydrocarbons law allows the government to delegate crude field operations.
The energy ministry will provide additional details about the deal on 5 March after the 3-4 March holiday for Carnival.
From 1-27 February 2025, Sacha produced an average of 74,680 b/d, down by 4pc compared with 77,884 b/d in February 2024, according to the data published by the hydrocarbons regulatory agency (Arch) and Petroecuador. Ecuador produced 474,860 b/d in January.
argusmedia.com 03 01 2025
