Ecuador to begin 'aggressive exploration' program: oil official

Quito (Platts)--9Mar2007

State oil company Petroecuador will begin an "aggressive exploration
program" in order to halt production declines, the vice president of its
production affiliate Petroproduccion, Oscar Garzon, said Friday.

"The oil situation is deplorable," Garzon said at a press conference.
"With aggressive exploration we can change the country's destiny."

Garzon said Petroecuador will look to begin exploration in the coastal
region and in new areas in the already producing Amazon region, with
drilling to start in 2008. This would include the ITT project in the far
eastern Amazon region with some one billion barrels of reserves, according
to a summary of the project present by Garzon. The fields have a natural
decline rate of about 3-4%, he said.

Some 340 wells would have to be drilled by nine drilling rigs for five
years throughout the country to increase production by 200,000 b/d in the next
five years, according to the proposal. The state currently produces about
260,000 b/d in both traditional state fields and those seized by the
government from Occidental Petroleum in May 2006.

In immediate plans, Ecuador has increased its projection for output from
the former Oxy fields to 90,000 b/d for 2007 from about 85,000 b/d due to the
start of a drilling program, the manager of the Petroecuador unit running
those fields, Wilson Pastor, said.

In traditional state fields, Petroecuador now projects an average
production of about 175,000 b/d this year. That is up slightly from the
projection of 171,600 b/d included in the country's budget, also due to new
drilling plans.

Petroproduccion will invest $302 million and spend $589 million on
operations in 2007, according to the budget recently passed by
Petroecuador's board. The administrative unit managing Oxy's former fields,
known as UB-15, was designated $292 million for investments and $205 million
for operations.

--Carla Bass, newsdesk@platts.com