Ecuador pulls tenders of gas field, oil blocks

Spanish Market: Crude oil, Natural gas
23/10/18

Ecuador has relinquished plans to tender the 40mn cf/d Amistad natural gas field and downsized its ambitious southeast upstream licensing round.

The round had been expected to cover 10-14 oil exploration blocks but will now feature just two, blocks 86 and 87 near the border with Peru and that country´s northern crude pipeline.

Opposition from indigenous communities living on the southeast acreage forced Ecuador to indefinitely postpone plans to tender the other blocks.

"Although we intended to tender all the blocks, we changed strategy to prevent social unrest," energy minister Carlos Perez said today during the annual oil and mining conference Enaep.

Ecuador hopes to advance conversations to offer blocks 86 and 87 directly to state-owned PetroPeru, during a binational presidential and cabinet meeting in Quito on 25 October.

According to Perez, Quito and Lima are already in talks to tailor an agreement in which Ecuador's state-owned PetroAmazonas, PetroPeru and a third investor party would jointly develop the acreage.

Crude produced at blocks 86 and 87 would be transported through the Peruvian pipeline to PetroPeru´s 65,000 b/d Talara refinery.

Perez told Argus that he does not believe that the remaining southeast blocks will be tendered during the current administration of president Lenin Moreno, who leaves office in May 2021.

Ecuador has also abandoned hopes to award the offshore Amistad field, located in the Gulf of Guayaquil, PetroAmazonas chief executive Alex Galarraga told reporters in Quito.

Amistad was part of PetroAmazonas' May licensing round which also featured two mature oil fields and two small oil fields. Amistad initially attracted no bids.

PetroAmazonas extended the deadline for interested companies to submit their offers, but none of the proposals finally made for Amistad complied with PetroAmazonas' requirement that drilling costs at the gas field should be maintained under $15mn per well, according to Galarraga.

PetroAmazonas is currently seeking an agreement with PetroPeru to develop two gas fields located in the Piura and Sechura basins in Peru.

Galarraga says PetroAmazonas hopes to secure concessions to operate these fields by the first quarter of 2019.

Quito desperately needs an extra 30mn-40mn cf/d that could be liquefied and brought from Peru by ship and unloaded at Ecuador's underutilized Monteverde LPG maritime terminal.

Ecuador already demands at least 90mn cf/d of gas to supply the state-owned 130MW Termogas Machala thermoelectric plant, and state-owned PetroEcuador's Bajo Alto and privately owned gas Vesubio liquefaction plants.

Quito also plans to gradually replace imported diesel and LPG with LNG for transport and industrial activities in Guayaquil, Ecuador's largest city, hoping to help reduce a $3bn government outlay for fuel subsidies, of which some 50pc is represented by the diesel subsidy, according to Perez.

LNG is key to supplying ceramics industries in Cuenca, Ecuador's third largest city, where the fuel is gradually replacing imported diesel and LPG.

Even though Amistad and most of the southeast blocks have been withdrawn for now, Perez said Ecuador maintains its goal of increasing crude production to 540,000 b/d by the end of the year and by 700,000 by the end of 2021, with growth driven by heavy-crude complex Ispingo-Tambococha-Tiputini (ITT).

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14/04/25

Keystone oil pipeline to restart today, pressure capped

Calgary, 14 April (Argus) — The 622,000 b/d Keystone oil pipeline is repaired and has approval to restart at a reduced pressure less than a week after spilling crude in North Dakota. Pipeline operator South Bow is planning a "controlled restart" of the Keystone system today, provided weather cooperates, the company said. The repair and restart plans were approved by the Pipeline and Hazardous Materials Safety Administration (PHMSA), which issued a corrective action order (COA) to the Calgary-based midstream company on 11 April. The pipeline is a major carrier of Canadian heavy crude destined for both the US midcontinent and the Gulf coast but was shut down on 8 April after spilling 3,500 bl near Kathryn, North Dakota. About 2,845 bl had been recovered by 12 April, according to PHMSA. The COA indicates Keystone was operating at 1,251 pounds per square inch gauge (psig) at the time of failure, below the maximum allowed operating pressure of 1,440 psig for the pipeline. Flow rate at the time of failure was 17,844 bl per hour. Keystone will be capped at 80pc of the pressure at the time of the failure, or 1,000 psig. PHMSA noted five prior spills from Keystone occurring in 2016, 2017, 2019, 2020 and 2022 that saw releases of 400, 6,592, 4,515, 442 and 12,937 bl of crude, respectively, which "show a tendency or pattern in recent years of increasingly frequent incidents resulting in larger releases". Prices on either side of the pipeline break narrowed ahed of Keystone's imminent return-to-service. Heavy sour Western Canadian Select (WCS) in Hardisty, Alberta, has narrowed by about 75¢/bl to a $9.10/bl discount to the May Nymex WTI calendar month average, so far, while the same assessment in the Houston, Texas, area has widened by nearly 30¢/bl to about a $2.40/bl discount to the May basis. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Funding cuts could delay US river lock work: Correction

14/04/25

Funding cuts could delay US river lock work: Correction

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IMO GHG pricing not yet Paris deal-aligned: EU

14/04/25

IMO GHG pricing not yet Paris deal-aligned: EU

Brussels, 14 April (Argus) — The International Maritime Organisation's (IMO) global greenhouse gas (GHG) pricing mechanism "does not yet ensure the sector's full contribution to achieving the Paris Agreement goals", the European Commission has said. "Does it have everything for everybody? For sure, it doesn't," said Anna-Kaisa Itkonen, the commission's climate and energy spokesperson said. "This is often the case as an outcome from international negotiations, that not everybody gets the most optimal outcome." The IMO agreement reached last week will need to be confirmed by the organisation in October, the EU noted, even if it is a "strong foundation" and "meaningful step" towards net zero GHG emissions in global shipping by 2050. The commission will have 18 months following the IMO mechanism's formal approval to review the directive governing the bloc's emissions trading system (ETS), which currently includes maritime emissions for intra-EU voyages and those entering or leaving the bloc. By EU law, the commission will also have to report on possible "articulation or alignment" of the bloc's FuelEU Maritime regulation with the IMO, including the need to "avoid duplicating regulation of GHG emissions from maritime transport" at EU and international levels. That report should be presented, "without delay", following formal adoption of an IMO global GHG fuel standard or global GHG intensity limit. Finland's head representative at the IMO delegation talks, Anita Irmeli, told Argus that the EU's consideration of whether the approved Marpol amendments are ambitious enough won't be until "well after October". Commenting on the IMO agreement, the European Biodiesel Board (EBB) pointed to the "neutral" approach to feedstocks, including first generation biofuels. "The EBB welcomes this agreement, where all feedstocks and pathways have a role to play," EBB secretary general Xavier Noyon said. Faig Abbasov, shipping director at non-governmental organisation Transport and Environment, called for better incentives for green hydrogen. "The IMO deal creates a momentum for alternative marine fuels. But unfortunately it is the forest-destroying first generation biofuels that will get the biggest push for the next decade," he said. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Bio-LNG could boom by early 2030s under IMO deal

14/04/25

Bio-LNG could boom by early 2030s under IMO deal

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Shale patch on edge after tariff drama

14/04/25

Shale patch on edge after tariff drama

New York, 14 April (Argus) — US president Donald Trump's back and forth over tariffs that sent oil prices tumbling to a four-year low last week has sparked jitters across the shale patch, although most producers are likely to take their time to respond. The oil and gas industry, one of Trump's biggest cheerleaders and donors during his election campaign, has been taken aback by the speed and scale of the president's escalating trade wars and executives are signalling growing impatience. Meanwhile, Trump's "Drill, baby, drill" mantra is even less likely to become a reality now, after oil slid below the $65/bl level that executives surveyed by the Dallas Federal Reserve Bank last month warned was needed to profitably sink a new well. Trump's imposition of punitive tariffs on nearly every major US trading partner led to a sell-off in stock, bonds and commodity markets until he announced a 90-day pause for most nations — except China — on 9 April. While it may be too early for talk about dropping rigs and curtailing production, companies will face tough questions from analysts about their contingency plans when first-quarter results start coming through later this month. One key difference from previous downturns in 2014 and 2020 is that exploration and production (E&P) firms are in a better position this time, with less debt on their balance sheets and more modest growth plans, which may help limit the initial fallout. But higher costs owing to tariffs on steel imports could offset the efficiency savings that have kept production going in an era of restrained spending. "E&Ps are likely to mostly take a wait-and-see approach — with a high level of uncertainty about future policy — and not prematurely lay down rigs," consultancy Enverus principal analyst Andrew Dittmar says. "If prices are weak headed into 2026, that is where you are likely to see a more material reduction in drilling budgets. Feeling dominated The shale industry has welcomed Trump's "energy dominance" agenda and his promise of a permitting overhaul. But cracks are appearing in that relationship because of his stop-start policy on tariffs. "This administration better have a plan," Diamondback Energy president Kaes Van't Hof said in a social media post, in a direct appeal to energy secretary Chris Wright. Shale is the "only industry that actually built itself in the US, manufactures in the US, grew jobs in the US and improved the trade deficit — and by proxy GDP — in the US over the past decade", Van't Hof, who is due to become Diamondback chief executive later this year, said. His company became the largest pure-play producer in the prolific Permian basin of west Texas and southeast New Mexico following its $26bn takeover of Endeavor Energy Resources last year. While few public producers were planning any kind of meaningful growth this year as higher dividends and buy-backs continue to be the priority, even that could eventually find itself on the chopping block. "The corporate reality for public players means that already modest growth could be at risk if prices remain near $60/bl," Rystad Energy vice-president for North American oil and gas Matthew Bernstein says. Little in the way of growth was forecast outside the core Permian this year even before Trump rolled out his tariffs. A prolonged period of lower prices could spur a downturn in the top-performing US basin. A combination of short-term activity levels, investor distributions and production could be sacrificed in order to defend margins, according to Rystad. And producers in the Delaware sub-basin could be especially vulnerable, given the region's steep initial decline rates, high well costs and large capital return requirements, the consultancy says. By Stephen Cunningham WTI breakeven price Nymex WTI futures month 1 Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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