Ecuador President’s Oil Revival Efforts Stumble Ahead of Runoff Election
Ecuador’s President Daniel Noboa faces challenges with his oil revival plan for the Sacha field, amid political pressures and a re-election campaign. Criticism of his management of the deal escalates with a finance minister’s resignation, while an opposition candidate pledges to terminate the arrangement. Noboa’s stringent payment demands create speculation about his political motives and the future of Ecuador’s oil production.
Ecuador President Daniel Noboa’s initiative to rejuvenate the country’s largest oil field is faltering as he approaches a critical re-election battle. Following an agreement to transfer management of the Sacha field to Sinopetrol, a consortium of foreign firms, Noboa has encountered widespread criticism for his management of the deal. Furthermore, his finance minister, Juan Carlos Vega, resigned over the situation, indicating discontent within his administration.
Opposing presidential candidate Luisa Gonzalez has pledged to annul the deal if elected in the upcoming runoff on April 13, intensifying scrutiny on Noboa’s oil strategy. The revival of the Sacha field is essential for Ecuador’s struggling economy, yet Noboa’s choices in selecting an operator have drawn bipartisan criticism. Questions linger regarding the consortium’s financial capability and expertise, especially from its members, including Sinopec’s Amodaimi and New Stratus Energy’s Petrolia.
In response to the growing controversy, Noboa has demanded an accelerated payment of a $1.5 billion entry fee from Sinopetrol, pushing the deadline to March 11, which is significantly earlier than initially agreed. Analysts speculate that this move may be politically motivated, as Noboa narrowly defeated Gonzalez by only 15,000 votes in the first electoral round. Sebastian Hurtado, a political risk expert, commented on the situation, suggesting that Noboa is attempting to minimize losses amid the damage already inflicted.
Noboa’s office has not provided a comment but confirmed the deadline during a public event. The urgency to secure the entry bonus is critical, with the president stating, “If the bonus isn’t paid tomorrow, then it won’t go ahead.” While increasing the Sacha field’s output could generate much-needed revenue for the winning candidate, the resultant $1.5 billion would also offer Noboa immediate financial relief regardless of the deal’s future profitability.
Historical attempts to elevate Ecuador’s oil production to 1 million barrels per day have been thwarted by ongoing financial instability, bureaucratic inefficiencies, and conflicts with international oil firms. Currently, production from the Sacha field has declined by 15% since its peak in 2014, with Petroecuador responsible for 80% of total output, while foreign firms account for the remainder.
President Daniel Noboa’s efforts to revitalize Ecuador’s Sacha oil field are compromised by mounting criticism and his re-election campaign. The demand for an early payment from Sinopetrol raises suspicions regarding his intent and political motivations. The outcome of his plans will significantly impact the future of Ecuador’s oil output and economic stability, as the election approaches amidst growing tensions.
Original Source: worldoil.com
