Arco, Agip clear to proceed with pipeline and field development in Ecuador

Mar 25, 1997 01:00 AM

Mar. 7, 1997 The Ecuadorian Ministry of Energy and Mines has issued a decree which clears the way for Arco Oriente and its partner Agip Petroleum, to begin development of the Villano oil field in eastern Ecuador. The decree authorises modifications to Arco/Agip's existing development plan to include the construction of a 130 kilometre (81 mile) secondary pipeline to transport oil from the planned Villano field processing facilities to the Transecuadorian Pipeline System (SOTE). These modifications were agreed upon in June 1996, but have awaited ministerial authorisation to proceed. Detailed engineering and environmental impact studies for both the pipeline and oil field development will be completed over the next six to seven months and the pipeline will be operative by 1999.
Arco and Agip have discovered a major petroleum reservoir at Villano in Oriente province. Over their 20-year contract with Petroecuador, the Ecuadorian state oil company, they expect to recover 160 mmb of 21-degree API-standard gravity oil.
The secondary pipeline will be designed to carry 80,000 bpd of crude oil, but will initially carry 30,000 bpd. The excess capacity will be available for other developments in the area as well as give Arco/Agip the potential to increase production from the Villano oil field.
Arco Oriente holds a 60% share of the partnership with Agip and will operate the Villano field and secondary pipeline. The oil itself is owned by the Ecuadorian government which will reimburse the two partners for their investment in oil exploration, development and production after development is complete and production begins.

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