Ecuador’s President Daniel Noboa has issued an ultimatum to the Sino-Canadian consortium selected to develop the country’s largest oil field. He warned that the contract for the Sacha field, located in the Amazonian province of Orellana, would not be signed unless the consortium, made up of Chinese group Sinopec and Canadian firm New Stratus Energy, pays a deposit of $1.5bn. The deposit must be paid before March 11, 2025, for the agreement to come into force.
Although the contract has been awarded to the consortium, its signature is suspended until the non-refundable deposit is paid. President Noboa stated that if the deposit is not paid within the specified time, he would explore other options for the development of the field. In a message posted on social media, he stressed the urgency of the situation and emphasised that he expected the consortium to act “with the urgency that the Ecuadorian people deserve.”
A contract with variable financial terms
Energy Minister Inés Manzano indicated that the deadline for signing the contract was one month, specifying that it was a 20-year agreement that would allow Ecuador to receive oil revenues. These revenues would be linked to the price of oil, with a variable share ranging from 19% to 26.5% depending on fluctuations in global oil prices. The agreement is expected to provide a significant source of income for Ecuador, which heavily depends on oil revenues.
Growing local opposition
The project has been strongly criticised by the Confederation of Indigenous Nationalities of Ecuador (Conaie), the country’s leading indigenous organisation. It expressed its discontent, arguing that Ecuador would receive too small a share of its own natural resources. The organisation condemned the terms of the agreement and questioned the government’s management of the oil industry.
Moreover, despite the government inviting other companies to participate in the development of the field, no responses have been received to date. This raises doubts about Ecuador’s ability to attract additional investors to this strategic sector.
