Ecuador Invites Bids to Build New Refinery

Reuters, March 19, 2019

Ecuador will launch an international bidding round for the construction of a new 300,000 barrel per day (bpd) refinery in May, Energy Minister Carlos Perez said in an interview on Monday. That project will also include a concession to upgrade the 110,000 bpd Esmeraldas refinery, which is undergoing a planned partial shutdown for maintenance, Perez said.

He added that Esmeraldas, which has been partly closed since March 1, will remain shut for six weeks longer than the 54 days initially expected. The refinery is producing 55,000 bpd, around half its capacity.

The reason is some issues we are finding upon disassembling different parts of the refinery, including the ovens and the [catalytic cracking] unit,” he said. “There is a lot of work to be done, which is why we want someone to come and administer it adequately.

A prior $2 billion overhaul of the refinery by the previous leftist government of President Rafael Correa was insufficient to repair and modernize the Andean country’s largest plant, forcing Petroecuador to plan new maintenance and upgrade projects under current market-friendly President Lenin Moreno.

Perez added that the South American country planned to boost its crude output by 30,000 bpd to a total of 560,000 bpd by the end of 2019.

Ecuador has asked the Organization of the Petroleum Exporting Countries (OPEC), of which it is a member, for special authorization to increase its production quota to 535,000 bpd, up from 508,000 bpd currently. Perez said he expected a favorable response from OPEC. Ecuador is one of the smallest OPEC members in terms of crude output.

State-run oil company Petroamazonas plans to issue a $200 million bond to finance drilling activities at the Sacha field in order to help boost output, he said. The additional financing will allow the company to drill 30 wells this year, rather than the eight initially planned, Perez said.

(Reporting by Alexandra Valencia; Writing by Luc Cohen; Editing by Marguerita Choy and Richard Chang)

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