An Understanding Memorandum is signed in Quito for the cooperation in hydrocarbons between PETROAMAZONAS and PETROPERU

The state-run companies PETROPERU, from Peru, and Petroamazonas EP, from Ecuador, signed this Wednesday in Quito, Ecuador an Understanding Memorandum which follows binational agreements in matters of hydrocarbons and enables the companies to study the possibility of establishing cooperation mechanisms for the production and transportation of crude between both countries.

In the last 20 years, the relations between Peru and Ecuador have been strengthened thanks to the intention of both nations, interested in working for the economic and commercial integration and complementation for the development of its populations.

Since 1999, when the Mining-Energy Integration and Complementation Agreement was signed between Peru and Ecuador, both countries have had several conversations for defining the viability of transporting the crude of the Ecuadorian Southeast through the North Peruvian Pipeline.

In December 2015, in the IX Binational Ministry Cabinet Peru-Ecuador it was established as one of the commitments the signing of a Understanding Memorandum PETROPERU and Petroamazonas to evaluate the technical, economic and legal conditions for the exportation, extraction, transportation, distribution and sale of hydrocarbons coming from Block 86 of the Ecuadorian Southeast, in the province of Pastaza.

The memorandum signed by the South American state-run companies aims at sharing detailed information “for the possible development of the exploration and extraction of hydrocarbons in Block 86 and its several facilities”. Block 86 is located in the Ecuadorian Southeast, in the province of Pastaza, the Ecuador-Peru border, in a new area for the Ecuadorian oil industry.

The document was signed by the representatives of the oil companies of both states, Germán Velásquez Salazar, Chairman of the Board of PETROPERU and José Luis Cortázar, General Manager of Petroamazonas EP. These initial agreement is a product of the dialogues that Peru and Ecuador have maintained for several years to establish a complementary agenda energy matters, and is part of the commitments celebrated in the IX Binational Ministry Cabinet Peru-Ecuador that took place in December 2015.

The Chairman of the Board of PETROPERU stated that “this process will allow the evaluation of the technical, legal, environmental and economic conditions for the possible development of an oil exploration and extraction project in Block 86”.

About PETROPERU S.A. It is the company of the Peruvian State whose social objective is to carry out the hydrocarbon activities established in the Hydrocarbon Organic Law, Law Nº 26221, in all stages of the oil industry and commerce, including its derivates, basic and intermediate petrochemistry and other forms of energy, according to article 3º of the Legislative Degree Nº 43, modified by Law Nº 28840, Law of Strengthening and Modernization of PETROLEOS DEL PERU – PETROPERU S.A., as well as by Law Nº 29163 of the Peruvian State.

PETROPERU S.A. has the available capacity and infrastructure, through the North Peruvian Pipeline, to transport hydrocarbons; making use of these available capacity, it could transport the oil coming from the blocks in the Ecuadorian Southeast, through Peruvian territory.

About PETROAMAZONAS EP. It is the Ecuadorian public company for exploration and extraction of hydrocarbons. It operates in 20 blocks in the Amazon and the Shore. Its production reached historical record on April 2016, with a daily average of 366.754 barrels per day during the month.