QUITO, March 3 (Reuters) - Ecuador's government awarded

an onshore oil contract to a consortium led by China's

state-owned producer Sinopec on Monday, in a push to

grow crude output from the country's Sacha block.

The block is Ecuador's most productive, located in the

country's northeastern Amazonian province of Orellana. It pumped

77,000 barrels per day (bpd) last year.

The 20-year production sharing contract for Sacha would be

run by a consortium comprising Sinopec and Canada's New Stratus

Energy ( RDRIF ).

Energy and Mining Minister Ines Manzano said the consortium

has four weeks to sign the contract, and pitched the deal as a

way to upgrade an aging but still productive asset.

"It's been said that Sacha is the (local oil sector's) crown

jewel, but I'm sorry to say its a rusty crown and the jewels

need to be polished," she said at a press conference, stressing

that the block is not being privatized or sold off.

"But it will be operated with greater efficiency," she said.

New Stratus said in a statement on Monday announcing the

deal that it includes an upfront cash payment of $1.5 billion,

$600 million of which it will pay, with the contract expected to

formally commence later this month.

Sinopec holds a 60% stake in the consortium, and New Stratus

the remaining 40%.

Ecuador is one of Latin America's smaller oil producers,

currently producing 465,000 bpd, far behind regional

heavyweights Brazil and Mexico.

The project could add some 373 million barrels of oil output

over the next two decades, with government coffers expected to

take 82% of the income generated assuming an average price of

$62 per barrel, according to the Ecuadorean government.

Guillero Ferreira, deputy hydrocarbons minister, told

reporters that the contract should help boost Sacha's output to

100,000 bpd over the next three years.

In the past, officials have said Ecuador does not have the

funds or the technology needed to best develop Sacha.

Beyond the upfront cash payment, New Stratus said the

consortium has agreed to spend more than $1.7 billion during the

contract's initial phase to finance a ministry-approved

development plan.

Authorities have defended direct negotiations with the

consortium, versus opting for a public auction, arguing the law

allows such a direct award.

The contract comes a little over a month before conservative

President Daniel Noboa will face off against leftist Luisa

Gonzalez in a April 13 run-off election.