Possible weaknesses regarding the oil exploitation in the South-East were identified

Five possible factors would affect the interest of oil companies for their participation in the Southeast oil bidding round, which was convened by the hydrocarbon bidding Committee and the Secretariat of hydrocarbons, according to analysts.

Luis Calero believes that the geographic location of the fields (Pastaza, Morona Santiago, Napo and Orellana) has the disadvantage of not having land access or infrastructure for the evacuation of the crude, therefore transportation should be through the river, which represents an increase in costs.

For his part, Walter Spurrier, director of Analisis Semanal, said that the lack of offers evidence that the terms of the process are not sufficiently attractive, and indicated that the Government has a service contract model with a fixed rate, within which the State will be the beneficiary if there is an increase in the price of oil.

Both analysts agree that there is a conflicting atmosphere from the State towards oil companies, like the cases of Chevron, Oxy, Perenco, Petrobras, as well as problems with the communities, for example on the subject of Sarayacu.

Another important factor is the drop in the price of oil which makes the investment in this sector to become more risky, because there is a reduced performance. Analysts recommend to restart the bids with more attractive terms.