ONGC bid for Ecuador refinery

Oil and Natural Gas Corporation (ONGC) will be biding for constructing a $2.5-billion refinery in Ecuador and acquiring oil and gas exploration blocks in that country.

Ecuador is looking for a partner to set up a greenfield refinery with a capacity of 200,000 barrels. It is currently producing 550,000 barrels of crude oil per day and exports one-fourth of it.

ONGC has also evinced interest in bidding for some of the 11 oil and gas exploration blocks Ecuador is putting up for auction in May, he said.

"ONGC has shown interest in constructing 2,00,000 barrels per day refinery in Ecuador which will cost $2.5 billion," Ecuador Energy Minister Eduardo Lopez Robayo told reporters on the sidelines of Petrotech 2005 conference today.

Lopez and PetroleuM minister Mani Shankar Aiyar signed a joint press communique on cooperation in the hydrocarbon sector.

Lopez said his country had faith in ONGC's technical and financial capability but added that the Indian company would have to bid for the project for which Japanese, Chinese and Norwegian companies were also in fray.

Stating that the country was considering rejoining the Organisation of Petroleum Exporting Countries (OPEC), he said, "When we left OPEC in 1995, Ecuador was a small country (in oil production). Now there is a reconsideration as to whether we should get into OPEC or not."

A decision on this will be taken in the next few months after evaluating benefits and demerits of such an action, Lopez said.

According to the joint statement, ONGC would provide training to geo-scientists and engineers of Ecuador in areas of petroleum exploration, drilling, production, safety and foreign trade.

ONGC would also give consultancy support to set up research and development institutions in field related hydrocarbon exploration and production in Ecuador.

Ecuador plans to call for bids in May 2005 to build a new refinery under the ITT (Ishpingo-Tambochocha-Tiputini) oilfield-cum-refinery project in the north of the country.

ITT oil field, located in Ecuador's eastern Amazon jungle near the Peruvian border, holds 909 million barrels in reserves and can produce 190,000 barrels of oil per day.

"ONGC Videsh (the foreign arm of ONGC) has expressed interest in participating in the appraisal and development of ITT field in Ecuador in the forthcoming offer for it and other blocks and the Ecuador minister has assured considering (the request) at the highest level," according to the joint press communique.

Lopez said Ecuador will offer 11 oil and gas blocks for exploration and production by May and ONGC was welcome to bid.

ONGC may face competition from Japanese, Chinese, Dutch and Norwegian companies in the auction, he said.

Ecuador plans to call private-sector bids on the project during the second quarter of next year. The goal is to help boost the country's economy and oil production to ensure a steady stream of government revenues and reduce a hefty public sector debt.