QUITO: Ecuador and Canada’s Ivanhoe Energy have officially terminated a contract, after the company halted oil operations in the country in August due to crude that was heavier than expected, officials said Wednesday.
Ivanhoe and Ecuador’s state run Petroamazonas oil company said they had agreed on a “technically early termination by mutual agreement,” the Ministry of Nonrenewable Natural Resources said in a statement.
Ivanhoe had been awarded the right to operate in the Amazon province
of Napo in an area with estimated reserves of 4.5 billion barrels, including the Pungarayacu oil field.
The Canadian company, which had invested around $61.8 million during
the entirety of its time in Ecuador from 2008 and 2013, was not entitled to any compensation, the ministry said.
In August, the Canadian company withdrew oil production in the
Ecuadoran Amazon after finding that the field contained heavier crude than expected.
Ivanhoe held a 30-year oil exploration contract in Ecuador’s Amazon
jungle, at a price of $37 per barrel.
Ecuador is the smallest OPEC member state, having produced 556,000
barrels per day between January and November 2014.