Ecuador launches tender to reopen 100 oil wells and extract gas

RIO DE JANEIRO, BRAZIL – Ecuadorian state oil company Petroecuador has launched a tender to reopen 100 abandoned oil wells and extract associated gas from fields in the Amazon, the company said Friday.

The reopening of these 100 wells will allow Ecuador to increase its oil production by 15,000 barrels per day in about eight months, Petroecuador general director Ítalo Cedeño said in a speech to the Society of Petroleum Engineers (SPE).

These hundred or so wells, which will likely be awarded in groups of 25, have a facility and environmental licenses because they belong to fields that are already in production.

There are about a thousand wells that the state-owned company plans to bring back online across the country to boost national oil production in times of high crude oil prices.

The state-owned company accepts expressions of interest from international companies wishing to bid for the work until April 7.

The investment required to rehabilitate these first 100 wells is about US$80 million, according to Cedeño.

In the case of associated gas, this is the first time such a process has been carried out in the country. The objective is to capture the production of the fields through the use of a virtual gas pipeline, which will optimize the operation of the Shushufindi gas plant by 25 billion cubic feet per day.

In this regard, the Petroecuador executive also stressed that this process will optimize associated gas and minimize the environmental impact of flaring.

The two processes are governed by the “Specific Services with Financing” contract model, whose formula is linked to the West Texas Intermediate crude oil benchmark and gas and liquids transportation tariffs.

These measures are part of the current Petroecuador government’s strategy to increase oil equivalent production by at least 100,000 barrels this year.

They are also in line with the goal set by President Guillermo Lasso when he took office ten months ago to double oil production by 2025, reaching one million barrels of crude oil per year, and to achieve better use of gas derivatives.

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