Encouraging news from the oil sector

ECUADOR - In Brief 02 Feb 2018 by Magdalena Barreiro

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An increase in price for the Ecuadorian crude oil basket to around $60/b is not the only good news coming from the sector. Minister Carlos Perez announced the Republic will continue to develop the Refinery from the Pacific, now the Refinery from Manabi, but now under more reasonable and attractive conditions. The initial investment for this project amounts to $5,000 million plus another $3,000 million to build adjacent pipes and other infrastructure. The full $8,000 million should be financed by an international private consortium presenting bids in the next two months. The contract will be signed under the BOT (build, operate, transfer) modality, and investors will be favored with a 10-year income tax exemption and a 5% tax rate deduction during the subsequent five years.The government expects a total refinery capacity of 300,000 barrels per day of heavy crude oil coming from Block 43 of the newly exploited ITT camps. Although the time of construction and the time to achieve full capacity has not been established yet, the project will provide Ecuador with the potential to replace derivatives imports that at this time amount to $2.9 billion and also to reduce the subsidy cost, which by the end of 2017 totaled $1.1 billion.