February 27, 2018 / 6:16 PM / a year ago

UPDATE 1-Ecuador seeks to lure investors by expanding oil auction -minister

(New throughout, Adds quotes, context on the blocks to be offered)

By Alexandra Valencia

QUITO, Feb 27 (Reuters) - Ecuador will increase the number of oil and gas areas it plans to offer in an auction next month by including mature crude fields and an offshore gas field, oil minister Carlos Perez told Reuters on Tuesday.

Many Latin American countries are trying to improve their offerings and contract rules to secure foreign investment amid intense regional competitions this year, with major auctions expected in Mexico, Brazil and Uruguay.

The minister said the Amistad gas field in the Guayaquil Gulf will be added to the Ecuadorian auction, along with at least four mature or small onshore oil blocks that will be developed under service contracts with state-run oil company Petroamazonas.

“Our goal is to attract investment and also look for an increase in production and reserves in the future,” Perez told Reuters in an interview before a public event to review the country’s main oil achievements last year.

Amistad is the country’s only gas producing field with an output of 39 million cubic feet per day from six active wells, according to official figures. The government has not yet decided the contract model for that area as new legislation for the gas industry is needed, Perez said.

The mature onshore oilfields include the Cuyabeno, Oso and Vinita-Blanca areas at Ecuador’s Amazon region, Perez said. Those will be added to eight onshore areas in the country’s Northeast, close to the border with Colombia, under the Intracampos bidding round, whose results are expected in August.

Ecuador, which is opening to international markets, tackling tax reform and public-sector austerity measures under the government of President Lenin Moreno, has said it plans to increase crude production by 50,000 barrels per day (bpd) this year by adding barrels from its ITT block.

It is switching to shared profit agreements from service contracts in the areas not operated by Petroamazonas to secure more investments. The new terms will allow producers to be paid in oil and enable them to export or sell the barrels to local refineries.

The Andean country’s crude output has fallen to 515,000 bpd, Perez said, below the output ceiling of 520,000 bpd when OPEC agreed to restrain production starting last year.

Perez recently started talks with OPEC to be allowed to increase Ecuador’s production this year despite the organization’s joint output cut agreement that is slated to run through the end of this year, he added.

“Ecuador’s production is marginal in the OPEC context. It is a commitment with them to maintain OPEC’s unity. We talked about it during the OPEC secretary general’s visit (earlier this month), they are giving Ecuador flexibility,” he said. (Reporting by Alexandra Valencia, writing by Marianna Parraga; editing by Susan Thomas and David Gregorio)

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