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Ecuador says upfront payment needed for Sacha oil deal not made
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Ecuador says upfront payment needed for Sacha oil deal not made
Mar 12, 2025 5:59 AM

QUITO, March 12 (Reuters) - The deadline for a

Chinese-Canadian consortium to pay a $1.5 billion upfront

payment to Ecuador in order to develop the country's most

productive oil block has passed, the energy minister said on

Wednesday, seemingly scuppering the deal.

President Daniel Noboa, who is seeking reelection in April,

had said the consortium, made up of subsidiaries of Chinese

state energy giant Sinopec and Canada's New Stratus

Energy ( RDRIF ), had until Tuesday night to make the payment and

that the deal would not go ahead without it.

The energy ministry awarded the

20-year contract

for the northeastern Sacha field - which pumped 77,000

barrels per day (bpd) last year - without a public bidding

process.

Unions, Indigenous organizations and opposition

politicians have criticized the awarding of the contract and

questioned whether Amodaimi Oil Company S.L., the Sinopec

subsidiary, and Petrolia Ecuador, the New Stratus subsidiary,

have the technical and operational capacity to operate the

block.

"There is nothing else to say, simply that the deadline

expired," energy minister Ines Manzano told local television

Ecuavisa on Wednesday morning.

The president has already said he will weigh other options

for the block if this contract did not go ahead. The government

has said it does not have the funds or the technology necessary

to increase production at Sacha.

Petrolia, the only member of the consortium who has

commented publicly on the deal, did not immediately respond to a

request for comment.

The contract included $1.7 billion in investment and a

plan to increase output from the field to 100,000 barrels per

day within the first three years.

The authorities had said that despite clauses which

would have determined production distribution based on the price

of oil and levels of extraction, government take from the

project's income, including the upfront payment, taxes and

charges for transport, would have been about 82%.

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