Industry News - New & Expanding Business - Ivanhoe Energy Ecuador to develop Ecuador's Pungarayacu heavy-oil field Ivanhoe Energy Ecuador to develop Ecuador's Pungarayacu heavy-oil field
by: OilOnline
Thursday, October 09, 2008
Ivanhoe Energy Ecuador Inc. has signed a contract with Ecuador state oil companies Petroecuador and Petroproduccion to explore and develop Ecuador's Pungarayacu heavy-oil field, utilizing Ivanhoe's HTL upgrading technology.
Ivanhoe Energy Ecuador, a Canadian company, is a wholly-owned subsidiary of Ivanhoe Energy Latin America Inc., the parent company of Ivanhoe Energy Inc.'s Latin America corporate group.
The contract, dated October 8, 2008, was signed today in a ceremony in the Presidential Palace in Quito, Ecuador's capital, attended by President Rafael Correa, the President's cabinet and senior ministers, Petroecuador's Executive President Luis Jaramillo, Petroproduccion's Vice-President Camilo Delgado and Canadian Ambassador Christian Lapointe.
The contract covers project appraisal and development of Block 20, including production and upgrading of the heavy oil. Block 20 is an area of approximately 426 square miles (1,100 square kilometers, or 272,000 acres), approximately 125 miles (200 kilometers) southeast of Quito, in the Amazon Basin.
Block 20 contains the 250-square-mile (647 sq. km) Pungarayacu heavy-oil field, which was discovered approximately 30 years ago. Ivanhoe plans to apply its patented field-located, HTL(TM) heavy-to-light upgrading technology to the development of the Pungarayacu field.
Petroproduccion drilled 26 wells in Block 20's Pungarayacu field during the 1980s. The field has been studied and evaluated by Petroproduccion, ARCO and other major oil companies. These third-party studies estimated that Pungarayacu contains between 4.5 billion barrels (Petroecuador-ARCO) and 7.0Â billion barrels (Petroecuador) of oil-in-place.
Confirmation of these resources would make the Pungarayacu field the largest accumulation of heavy oil in Ecuador and one of the largest in Latin America. Preliminary engineering estimates would support production from the field at rates in excess of 100,000 barrels per day.
Ivanhoe Energy Ecuador will lead the development of the project. The contract is guaranteed by corporate parent Ivanhoe Energy Latin America, which will obtain or provide all funding and financing for Ivanhoe Energy Ecuador's operations under the contract. This reflects the strategy of the corporate restructuring program that Ivanhoe Energy Inc. announced March 17, 2008.
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