China’s CNPC wins first oil drilling contract at Ecuador’s Ishpingo field

(Reuters) – The first contract for drilling at the key Ishpingo oilfield near Ecuador’s Yasuni National Park has been awarded to China National Petroleum Corp (CNPC), energy minister Juan Carlos Bermeo told Reuters on Wednesday.

The South American country, which is pushing legal reforms to win private investment through tax and job incentives, has also received interest from companies to migrate existing oil service contracts to profit sharing agreements. It plans to begin negotiations on those in the coming weeks, the minister said in an interview.

Following the approval of a new hydrocarbon law and linked legislation, Ecuador plans to move forward with planned oil auctions and competitive processes for securing much needed foreign and domestic capital for energy projects.

“We have a lot of hope on the Ishpingo field,” the minister said of the CNPC agreement in an interview. The first drilling campaign will involve 40 wells over the next 18 months. It will focus on the field’s allowed area, without extending to a zone protected by a court ruling that has prevented any company from extending drilling.

Ishpingo, part of the promising ITT-43 oilfield in Ecuador’s Amazonia region, is the latest part of the environmentally sensitive area to start drilling after Tambococha and Tiputini. It is expected to produce heavy oil, which will be added to the nation’s output of flagship Napo crude, Bermeo said.

Ecuador has set a goal of producing 580,000 barrels of crude and natural gas this year, an increase from the 477,300 boepd of 2021.

The country is searching for a company to share the operation of its 110,000-barrel-per-day Esmeraldas refinery, a process that will be officially launched in April.