Ecuador Responds to Bloomberg Article: Fernando Alvarado Espinel

To the Editor:

Re the article, China’s Andes Saig to Join Repsol in Ecuador Oil Drilling Freeze

I would like to make the following clarifications. The article refers to an alleged freezing of investments made by Andes Petroleum and Repsol in Ecuador, based on unauthorized and anonymous information sources, without presenting any solid proof. In fact, both oil companies and official statements denied this information or having provided any national or international means of communication, with information on this matter. The same happened with false claims on the provision of services of Halliburton in Ecuador.

Therefore, I would like to inform you that, contrary to what the article’s authors assert, both Repsol and Andes Petroleum have not reduced their investments in the Ecuadorian State. For your reference, in the period 2011-2014, the oil investment committed by private companies in the country was at least USD 1304.90 million. During that period, there was an actual execution of USD 1764.51 million, exceeding USD 459 610 000 of the committed amount.

It should be noted that one of the aforementioned companies in the report, Repsol, between 2011 and 2014, invested $306.78 million in the development of production on Block 16 and Block Tivacuno in the Amazon region of Ecuador, exceeding in USD 40, 33 million the initial amount pledged to the Ecuadorian State (USD 266.45 million). Meanwhile, Andes Petroleum invested USD 571.51 million during the same period, in the Tarapoa field of the Amazon, exceeding USD 230.58 million pledged to the Ecuadorian State.

This year, there is a pledge to invest USD 307 million from private companies in Ecuador. In the first quarter, 26.71% executed of this budget was registered, which accounts for a timely allocation of resources in the country’s oil production. Between January and March this year, they accomplished USD 82 million. With respect to the aforementioned companies, Repsol pledged to invest USD 43.12 million, out of which it has already invested 9.72 between January and March of this year (22.61%). On the other hand, Andes Petroleum pledged an investment of USD 70.91 million, out of which, it has already executed 46% (USD 33.15 million) only in the first quarter.

Regarding the delay of drilling, also mentioned in the article, it states that President Correa made spending cuts. While this is true, authors use this information to assert that the Ecuadorian government has delayed payments to oil operators due to low oil prices. This second assertion is not supported by any objective evidence, but tries to be based on facts that have no relationship to Ecuador. For example, they talk about the situation of Halliburton in other countries, particularly the United States, where the oil industry is massively laying off its employees.

This is not the first time an article signed by Nathan Gill violates the basic rules of responsible and ethic journalism. It increasingly exposes their lack of professionalism by publishing false information intended to harm the Ecuadorian Government. We already reported this situation on August 8, 2014, in a letter addressed to Bloomberg Agency signed by Economist Patricio Rivera, Coordinating Minister of Economic Policies, and Economist Diego Martínez Vinueza, President of the Directory of the Central Bank in Ecuador as a reply to the article “Bitcoin-Like Money is Ecuador´s Latest Dollar-Saving Plan” published August 5, 2014.

Due to a conflict of interests with the oil company Chevron, Nathan Gill contributes with these types of articles to media, and public relations lobbying campaign that the mentioned oil company has promoted in the United States and the world, even in Ecuador, in order to discredit the Ecuadorian government through Public Relations companies closely linked to Gill.

For all these reasons, I request this letter to be made public in your media in order to inform your audience the real facts in terms of stability of oil investments in Ecuador. Likewise, we reserve the right to take legal action if warranted in any court having jurisdiction over this matter for all damages caused to the Republic of Ecuador by the mentioned article.

-Fernando Alvarado Espinel
National Secretary of Communication and the annexes Republic of Ecuador