Ecuador to put New Stratus Energy blocks out to tender amid dispute

New Stratus Energy

08/12/2022 13:46

By Alexandra Valencia
       QUITO, Dec 8 (Reuters) - Ecuador will offer oil blocks
currently operated by a subsidiary of Canada's New Stratus
Energy in an international tender after the areas are returned
to the state in late December, the energy minister said
Thursday, amid a dispute with the company.
    New Stratus Energy  NSE.V  and its subsidiary Petrolia
Ecuador have called on Ecuadorean President Guillermo Lasso to
begin direct negotiations to extend agreements for blocks 16 and
67, which expire on Dec. 31, and change the type of contract
from provision of services to participation.
    But Lasso has told the company that the blocks, which
produce a combined 15,000 barrels per day (bpd), must be
returned to the state by the end of the month, Energy Minister
Fernando Santos told local news channel Ecuavisa.
    "The State has no obligation to extend a contract if it is
not through a bidding process," Santos said in an interview with
the channel. "Giving a $2 billion asset that in three weeks will
pass to the Ecuadorean people to a group of gentlemen, no matter
how respectable they may be, is unethical, it is illegal." 
    "We have told Petrolia that we are not going to extend (the
contract), asking it to submit to a bidding process so that the
blocks can be awarded in the most competitive, transparent and
ethical manner," he added.
    Following the Ecuadorean government's refusal to negotiate,
the Canadian oil company said this week that it will resort to
international arbitration, arguing that Ecuador has breached
contractual clauses by not accepting a direct negotiation on its
proposal.
    "Nowhere does it say that it is (Ecuador's) obligation to
extend the contract, so I don't see any basis for this lawsuit,"
Santos said.
    Petrolia Ecuador did not immediately respond to a request
for comment.
    The minister said the fields will be operated temporarily by
the state-owned oil company Petroecuador until the tender is
announced.
 (Reporting by Alexandra Valencia; Writing by Steven Grattan;
Editing by Kirsten Donovan)
 ((Steven.Grattan@thomsonreuters.com;))