The Business Year

Ítalo Cedeño

ECUADOR - Energy & Mining

Ítalo Cedeño

General Manager, Petroecuador

Bio

Ítalo Cedeño holds a degree in petroleum engineering from Escuela Superior Politécnica del Litoral (ESPOL). He did his postgraduate studies from Harvard University in Boston; Arthur D Little in Cambridge; and LUZ of Venezuela for his MS in program in petroleum. He has more than 40 years of experience in the hydrocarbons sector around the world, in which he has held important positions in the public and private sectors such as head of production methods at Shell-Maraven in Venezuela, project director for international acquisitions at Conoco in the US, and general manager of Petromanabí in Ecuador, among others. He actively participates in panel sessions, conferences, and events related to the industry.

Petroecuador is working on its goal to significantly increase production in oil and natural and associated gas to boost Ecuador’s national production overall.

How will proposed drilling efforts in Petroecuador’s fields benefit the country?

Ecuador’s economy will benefit from increased oil production. We have an ambitious goal in the next five years to go from 400,000bpd, which the company is currently producing, to 800,000bpd through new investments in exploration and production. With the right decisions and the support of state institutions in the form of suitable laws and regulations, we will be able to bring in world-renowned companies and their capital to the country. All these actions are aligned with the policies of the national government, led by President Lasso. We are already heading in that direction, and we are working together with my team on strategies that allow us to develop and extract oil. We do not have an option, as it is now or never. Our aim is also for EP Petroecuador to become a hydrocarbon company and for the equivalent barrels of oil to be incorporated into our national production, including the production of natural and associated gas.

How do you plan to increase the company’s production in five years?

This will be made possible through joint operation through consortiums in association with private companies that invest their capital and technology in the oil fields of EP Petroecuador. For example, we have received letters of interest from companies in rehabilitating 100 closed wells in a first phase and capture the associated gas in the production facilities of the Amazon region. In addition, we have identified eight main components of the strategic plan: an increase in production; the incorporation of associated gas and liquids to production processes; the evaluation and development of the mega blocks, East Center, blocks 43, 31, and 16, and West Center (Pungarayacu) and Costafuera (Amistad); the industrialization of the Esmeraldas Refinery; the conversion of the La Libertad and Monteverde refineries into the international mega hydrocarbons storage center; asphalt production; natural gas and fertilizers; and the development of the Lago Agrio-Coca and Machala-Guayaquil GNV. With this, we will increase production, modernize facilities, make them more productive, and develop additional resources for the benefit of Ecuador.

Another important oil project for Ecuador is Ishpingo-Tambococha-Tiputini (ITT). How are you involved in its development?

Currently, we are starting the operation of the first well on the Ishpingo A Platform, Tower 66, with a production of 3,600bpd, which is operated by the contracting company CNPC Chuanqing Drilling Engineering Company Limited (CCDC). It will contribute some 50,000bpd additional oil barrels per day of the 100,000bpd barrels of oil equivalent that the company expects to have by the end of 2022. Subsequently, EP Petroecuador will begin drilling the Ishpingo 6H well. A total of 36 wells have been planned (of which 35 are producers and one gravel re-injector) per platform, within a period of two years. Likewise, this project is developed by Ecuadorian technicians using the best specialized practices in the industry, in accordance with the provisions of the Constitution and environmental regulations.

What strategy is Ecuador using to sell its crude?

In April, we carried out a transparent public tender for the export of Ecuadorian Oriente and Napo crude oil in the medium term. EP Petroecuador awarded the refining companies Marathon Petroleum Supply LLC. 7,920,000 barrels of Oriente crude oil and Petroperú SA 3,960,000 barrels of Napo crude oil, which offered an additional premium of USD +0.75 per barrel and USD +0.72 per barrel, respectively. Also, since April, the ARGUS digital platform has been publishing daily spreads for Ecuadorian Oriente and Napo crudes. Their statistics will be based on the data that will be delivered by EP Petroecuador. The purpose is to make this information transparent, which serves as a basis for marketing Ecuadorian crude internationally. Regarding spot sales, two processes have already been carried out this year. The aim is to have at least 10% of the exportable balance of Ecuadorian crude on the market to obtain more revenues and benefits for Ecuador.

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