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Energy

Ecuador to reject Repsol asset sale to Canadian firm, energy minister says

QUITO/NEW YORK (Reuters) - Ecuador plans to reject Spanish oil company Repsol's REP.MC planned sale of its assets in the country to Calgary-based New Stratus Energy NSE.V, energy minister Rene Ortiz said on local radio on Thursday.

New Stratus had said in a statement last week that it had signed a letter of intent to acquire Repsol’s stake in two upstream oil blocks in Ecuador, as well as its stake in OCP Ecuador, which manages the country’s heavy crude pipeline.

Ortiz said New Stratus did not meet technical and financial requirements.

“Technically this company does not demonstrate that it has similar or better operations than Repsol,” Ortiz told the Vision radio station. “Financial capacity is needed, which it does not have.”

Mario Miranda, chief financial officer for New Stratus, said the ministry had not yet communicated the decision to the company. He said New Stratus met all requirements the government had set, and pledged to respect all environmental and labor liabilities.

“The financial capacity is there,” Miranda said by telephone.

Repsol did not immediately respond to a request for comment.

The deal would have involved Repsol’s 35% stake in the service contracts for Blocks 16 and 67, which produced some 16,280 barrels per day (bpd) in September. Contracts for both blocks expire in December 2022.

Repsol also has a 30% stake in the OCP pipeline, which has the capacity to transport some 450,000 bpd of crude.

Reporting by Alexandra Valencia in Quito and Luc Cohen in New York; Editing by David Holmes

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