Ecuador names new energy minister after resignation

Market: Crude oil, Natural gas, Oil products
28/04/22

Ecuador has named a mining vice minister to take over the top slot in energy after minister Juan Carlos Bermeo resigned today.

In a letter to Ecuadorean president Guillermo Lasso, Bermeo said that "his cycle in front of the entity has finished" and that he will resume his private activities.

Bermeo gave no additional reasons for his resignation.

Xavier Vera-Grunauer, now Bermeo's former vice-minister of mining, is set to be sworn in today as energy minister at 7pm ET.

Vera-Grunauer is a civil engineer with a PhD in geotechnics and civil engineering from the University of California, Berkeley. He has mostly worked in mining consulting for 21 years in Ecuador, Peru, Mexico and the US.

Vera-Grunauer takes over as minister for the oil, electricity and mining sectors during several key initiatives, including trying to increase crude production by 22pc this year to reach 580,000 b/d.

Although Ecuador's crude output has grown in the last three months compared with the fourth quarter, closing March with an average of 494,720 b/d, the numbers are still far from the 2022 goal.

Also underway is the negotiation process to switch 23 fee-based oil service contracts — managed by about 15 production and service companies — to production-sharing agreements. Talks began on 19 April with the first companies and the former minister of energy had hoped to complete the conversion process by September. A successful negotiation could lead to production increasing this year.

A third challenge is to issue Ecuador's Intracampos 2 tender by next June. The round consists of six blocks in the northeast near the border with Colombia that have around 107mn bl of 15-30° API crude in recoverable resources of 107mn bl. The output of these fields will be at around 22,000-28,000 b/d.

For natural gas, the ministry has also planned to tender the Amistad gas field in the second semester to revive its output that has about halved from 55.91mn cf/d in 2014 to 25.25mn cf/d in 2021.

In the electricity sector, Ecuador has three ongoing tenders to build 500MW in renewable power projects, a gas-fired thermoelectric plant of 400MW and a new northeast transmission grid to supply electricity to the oil industry. The three tenders are looking for $1.81bn of private investment.

By Alberto Araujo

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Voting set to conclude in race for White House

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