Petrolia Ecuador faces cancellation of state debt

Ecuador suspends its debt by refusing to pay the $290 million loan owed to Petrolia Ecuador. Petrolia Ecuador, is a subsidiary of the Canadian public company New Stratus Energy, in South America.

Partagez:

The Ecuadorian government had signed a contract allowing the company to exploit oilfield blocks 16 and 67 located in the Amazon. However, the executive of President Guillermo Lasso is now refusing to negotiate the extension and change of terms of the contracts.

The company Petrolia Ecuador claims its right to a direct negotiation committee and threatens to resort to international arbitration. In addition, it accuses the government of causing it a huge loss by refusing to assume the $290 million debt.

On this topic, the Department of Energy states:

“The state owed the contractor $290 million in unpaid rates. Upon termination of the contract due to expiration, this debt is extinguished.”

However, Petrolia Ecuador has fulfilled its part of the bargain by producing approximately 14,000 barrels of oil per day for the country. However, as allowed by law, the government has accumulated its debt by not paying when oil prices were below a certain amount.

With the contracts expiring on December 31, 2022, the company must now make do with the $60 million in royalties paid over the past two years. The remaining $290 million will be forgiven at the end of the contracts. However, Petrolia Ecuador will also use a mediation process before taking more severe legal action.

In the meantime, the management of the former operator is doing its best to limit the extent of the damage.

“The transfer is underway. We are paying the workers, the majority of whom were hired by Petrolia Ecuador. We are handing over the equipment, materials and assets,” said Ramiro Paez, Director of the company.

New operators

Despite the protests of the former operator, the government intends to nationalize the oil fields at its discretion. Thus, he announced that Petrolia Ecuador, the national company, should return blocks 16 and 67, in the Amazonian province of Orellana. The President of Ecuador, Guillermo Lasso, also refused to accept the terms of the negotiation to extend the contracts and to modify the conditions of operation.

The Ministry of Energy has already launched an international tender to find a new private operator in the short term. There could be many interested parties, as the Orellana province blocks together would represent annual revenues of $150 million, assuming an average oil price of $64.8 per barrel in 2023.

 

Faced with recurrent shortages, Zambia is reorganising its fuel supply chain, notably issuing licences for operating new tanker trucks and service stations to enhance national energy security and reduce external dependence.
The closure of the Grangemouth refinery has triggered a record increase in UK oil inventories, highlighting growing dependence on imports and an expanding deficit in domestic refining capacity.
Mexco Energy Corporation reports an annual net profit of $1.71mn, up 27%, driven by increased hydrocarbon production despite persistently weak natural gas prices in the Permian Basin.
S&P Global Ratings lowers Ecopetrol's global rating to BB following Colombia's sovereign downgrade, while Moody’s Investors Service confirms the group's Ba1 rating with a stable outlook.
Shell group publicly clarifies it is neither considering discussions nor approaches for a potential takeover of its British rival BP, putting an end to recent media speculation about a possible merger between the two oil giants.
The anticipated increase in the tax deduction rate may encourage independent refineries in Shandong to restart fuel oil imports, compensating for limited crude oil import quotas.
Petro-Victory Energy Corp. starts drilling of the AND-5 well in the Potiguar Basin, Brazil, as the first phase of an operation financed through its strategic partnership with Azevedo & Travassos Energia.
The Texan Port of Corpus Christi has completed major widening and deepening work designed to accommodate more supertankers, thus strengthening its strategic position in the US market for crude oil and liquefied natural gas exports.
BP Prudhoe Bay Royalty Trust is offering its interest in Prudhoe Bay, North America’s largest oil field, as part of its planned dissolution, assisted by RedOaks Energy Advisors for this strategic asset transaction.
CNOOC Limited’s Hong Kong subsidiary and KazMunayGas have concluded a nine-year exploration and production contract covering nine hundred and fifty-eight square kilometres in Kazakhstan, sharing investment and operations equally.
Donald Trump announced that the United States will no longer oppose Chinese purchases of Iranian oil, immediately triggering a drop in global crude oil prices and profoundly reshaping international energy trade partnerships.
Research firm S&P Global Commodity Insights lifts its outlook for the fourth straight year, betting on three point five mn barrels per day from 2025 despite lower prices.
Enbridge plans to expand its infrastructure to increase oil transportation from the American Midwest to the Gulf Coast, anticipating rising exports and addressing current market logistical constraints.
US commercial crude inventories significantly decline by 3.1 million barrels, widely surpassing initial forecasts and immediately pushing international oil prices higher.
The UK could have hydrocarbon reserves twice as large as current official estimates, according to Offshore Energies UK, highlighting the impact of fiscal policies on forecasts and the economic future of the North Sea.
Following US strikes in Iran, international energy companies partially evacuate their teams from Iraq as a precaution, while Lukoil maintains its entire personnel on southern oilfields.
Chinese independent refineries remain cautious amid rising Iranian crude prices driven by escalating Iran-Israel tensions, potentially threatening access to the strategic Strait of Hormuz.
Gazprom, affected by a historic $6.9bn loss in 2023, is offering Pakistani state-owned firm OGDCL its petroleum assets in Nigeria to strengthen its presence in Asia’s energy market, according to Pakistani sources.
Donald Trump urges control of oil prices following U.S. military action against Iranian nuclear facilities, amid escalating tensions around the strategic Strait of Hormuz, threatening to significantly impact global markets.
PermRock Royalty Trust announces a monthly distribution of $539,693 to unit holders, impacted by reduced oil volumes and prices in April, partly offset by increased natural gas sales.