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Perez Companc Joins Ecuador's OCP Oil Pipeline Group

PETROLEUMWORLD
Caracas, Feb. 20

DJ/Perez Compac Ecuador, a unit of Argentine energy giant Perez Companc SA (PC), said Tuesday that it has joined Consortium OCP Ecuador S.A., which recently signed a contract to build a new pipeline at a cost of around $1.1 billion.

Perez Company's general manager in Ecuador, Horacio Begaries, told Dow Jones Newswires that the company has been a member of the consortium since last Friday after having purchased a 15% stake in OCP. He declined to provide further details.

According to the Superintendent of Ecuadorean Companies, OCP Ecuador's capital amounts to around $55 million, or 55 million $1 shares. In addition to Perez Companc, the OCP consortium includes Occidental Petroleum Corp. (OXY); Kerr McGee Corp. (KMG); Repsol-YPF SA (REP); Agip SpA (I.AgI); and Alberta Energy Co. (AOG), all of which already have operations in the Ecuadorean Amazon. The final member of the group, Argentina's Techint, has the responsibility of building the new pipeline.

On Feb. 15, Ecuadorean Energy Minister Pablo Teran and OCP Ecuador President Hernan Lara signed the contract to build the pipeline. When completed, the new oil pipeline is expected to transport around 450,000 barrels per day, with a maximum capacity of 518,000 barrels per day.

Of the total daily volume, some 290,000 barrels will be transported by companies in the OCP consortium and 100,000 will be transported by the government, from the oil fields that it operates in conjunction with some of the OCP members.

The remaining 60,000 barrels per day will be shipped by companies that aren't in the consortium. Begaries said that, as a new member of the consortium, Perez Companc Ecuador can transport around 80,000 barrels per day via the pipeline.

Since 1996, Perez Companc Ecuador has operated in block 31 in the Orellana Province, in the Amazon region. In the block, the company has 312 million barrels of proven oil reserves in three fields. The OBE oil field has 167 million barrels, the Apaika oil field has 115 million barrels and the Nasino oild field has 30 million barrels of reserves.

Begaries said each oil field could produce between 5,000 and 7,000 barrels per day. The company expects to begin production early in 2003. Perez Companc, which is controlled by PC Holdings SA, is one of Argentina's largest private companies. The company's activities include production and transportation of petroleum and gas, petrochemicals, distribution of electric energy and forestry.