October 12, 2018 / 2:27 AM / 7 days ago

INTERVIEW-Ecuador, Peru in talks to explore oil and gas blocks - energy minister

(Adds quote, context on auctions, OPEC comments)

By Alexandra Valencia

QUITO, Oct 11 (Reuters) - Ecuador has begun talks with neighboring Peru to jointly explore two oilfields at the border and allow state-run Petroamazonas to operate natural gas areas in Peru, Ecuadorian Energy Minister Carlos Perez said on Thursday.

Ecuador, which earlier this year awarded foreign and domestic energy firms exploration and production rights for four oil blocks in the Andean country, plans to continue offering areas through an onshore auction later this year and another in 2019 for natural gas blocks off its Pacific shore.

“We could form a joint venture between (state-run oil firms) Petroamazonas and Petroperu plus a private company to bring in capital,” Perez told Reuters in an interview.

The crude to be jointly produced along the border would feed Peru’s 65,000-barrel-per-day Talara refinery through an existing pipeline, while natural gas to be produced in Peruvian territory would be exported to Ecuador to ease a shortage there.

Ecuador President Lenin Moreno’s government is moving fast to attract foreign investment in the country’s energy industry to reverse a slow decline in crude output.

Other countries in the region, including Brazil, Mexico, Colombia and Argentina, also are competing for oil capital.

Oil contracts in Ecuador have been changed to allow operators to export independently and over a dozen crude and gas blocks are planned to be offered to foreign companies through production agreements and service contracts.

After completing the Intracampos 2 onshore oil tender in the last quarter of 2018, Ecuador will next year auction exploration and production rights for gas blocks off the Esmeraldas, Manabi and Guayas shores, which have been studied but reserves have not been confirmed.

The country’s largest gas field, Amistad, is also being offered for private investment.

“We want to bring large companies (to the gas auction) because bigger investment is required there,” Perez said.

Ecuador, which plans to boost oil output to 590,000 barrels per day (bpd) in 2019 from 520,000 bpd this year, supports a crude production increase at the December OPEC meeting, he said.

“Due to national interest, Ecuador wants to have the option of being able to increase production. That will be our point of view (in the upcoming OPEC meeting),” Perez said.

The current crude price of between $70 and $80 per barrel is “reasonable”, Perez said, adding that “we must find a balance” in the market. (Reporting by Alexandra Valencia; Writing by Marianna Parraga; Editing by Sandra Maler and Darren Schuettler)

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