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LatAmOil PERU LatAmOil

The decline is a heavy blow for the Latin Amer- month, 31% higher than in the same month of
ican country, which had been achieving its pro- 2018, largely because of higher output from the
duction targets in the months preceding the Amazon’s Loreto block and from the Tumbes
outbreak. Basin offshore Peru, SPH said.
Crude production in Peru hit its highest level Peru’s government is hoping to see oil pro-
in five years last November, according to statis- duction reach 100,000 bpd. The country’s crude
tics from the Peruvian Oil and Gas Association output has been declining since the 1990s, and
(SPH). yields are currently only around one quarter of
Oil production reached 63,738 bpd that what they were in the 1980s. ™

ECUADOR
Petroecuador, Petroamazonas CEOs

resign ahead of planned merger

THE CEOs of Petroecuador and Petroamazonas Correa, who headed the government of Ecuador
recently resigned ahead of a planned merger of between 2007 and 2017, the country’s oil indus-
the two state-owned oil companies. The Ecua- try became largely financed by China.
dorean government has said the tie-up will be In a landmark $2bn deal in 2012, Beijing
completed before the end of the year. agreed to provide the country with financ-
Until the companies’ boards have named ing until 2020 in return for receiving as much
temporary replacements, Petroecuador CEO as 90% of Ecuador’s oil shipments each year.
Ricardo Merino and Petroamazonas CEO Juan Meanwhile, Petroecuador signed a total of seven
Carlos Bermeo will remain in their posts, the contracts worth around $5.3bn with two gov-
country’s Ministry of Energy and Non-Renew- ernment-run Chinese companies, PetroChina
able Natural Resources said in a statement. The and Sinopec, during Correa’s administration.
ministry also declared that it would take steps to Petroecuador is still contracted to ship
ensure operational continuity during the tran- 500mn barrels of oil to the Chinese compa-
sition period. nies and to Thailand’s PTT International by
Petroecuador controls the South Ameri- 2024. However, critics say that these deals had
can state’s oil refineries, while Petroamazonas disadvantageous terms that served to stretch
focuses on upstream oil development in the Ecuador’s finances. They also allege that the
Amazon region. association with China reduces transparency in
Neither the CEOs nor the ministry have the energy sector and isolated the country from
described the upcoming merger as a factor in other potential creditors. ™
the resignations, according to Reuters.
Merino took the helm at Petroecuador in
September, following the resignation of for-
mer CEO Pablo Flores. In his resignation letter,
Merino suggested the company conduct an
“objective and technical” analysis of a deal with
two Chinese development banks, according to
a Reuters report. That deal is designed to help
Quito obtain loan funds in exchange for crude
shipments, as part of a wider effort to ensure that
the country is producing enough crude to meet
current export commitments.
Chinese financing of Ecuador’s oil sector
dates back to 2009, when state-run PetroChina
first offered Petroecuador $1bn in financing.
Under the administration of President Rafael Petroecuador is slated to merge with Petroamazonas (Photo: El Comercio)

Week 45 12•November•2020 www. NEWSBASE .com P17