Ecuador, Venezuela Launch Refinery Project
January 08, 2008
The energy ministers of Ecuador and Venezuela signed here Monday a letter of intent for the creation of a mixed company to build a refinery on Ecuador's Pacific coast and to pursue other petroleum projects.
Ecuador's Galo Chiriboga said that after signing the accord, in
which Venezuela will participate as the initial investor, the plan
is to build a refinery with the capacity for processing 300,000
barrels of crude per day.
He said that in the next six months "conceptualization studies"
will be carried out that will allow the refinery to be built in the
coastal province of Manabi and, once the project is finished, other
Latin American companies will be encouraged to join in.
Currently, Ecuador is forced to ship crude abroad for refining.
The ministers also outlined details of the participation of
Venezuelan state-owned oil giant PDVSA in the Ecuadorian Amazon oil
field known as Sacha.
Venezuela's Rafael Ram`rez said that for PDVSA the Sacha
operation will be no problem since it has characteristics similar to
the oil wells in his country.
At the same joint press conference, Ramirez said that the price
of oil, currently around $100 a barrel, is fair.
"We have enough oil, a good volume of inventory, except there are
factors that come together to maintain a price that we as producing
countries see as fair," Ramirez said.
He said that the increase in the barrel of petroleum is due to
"the devaluation that the dollar has suffered over the past three
years, speculation in the oil market and the economic crisis in the
United States, as well as the geopolitical situation in
But Ramirez said that this increase has also produced an
"extraordinary" increase in production costs that producing
countries have assumed "responsibly."
He gave the example of a drill that used to cost $75,000 but now
goes for $400,000.
Venezuela is the world's fifth-leading oil exporter and a top
supplier to the United States, while Ecuador only produces around
600,000 barrels per day, though Quito depends heavily on the
revenues from petroleum exports.
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Refinery of the Pacific
Refineria del Pacifico-CEM
El Aramo Ecuador