Noboa’s government and Petroecuador workers join forces to boost oil production.

The government of Daniel Noboa, with strong support from unions and the majority of Petroecuador workers, has taken a historic step by delegating the exploitation of the Sacha Field – Block 60 to a Chinese-Canadian consortium.

This decision, which marks a milestone in the country’s energy policy, aims to increase production from 75,000 to over 100,000 barrels per day, inject $1.75 billion into modernization, and provide the state with an upfront payment of $1.5 billion.

This field, the most important in the country, is set to sign a participation contract, similar to those signed by previous governments for the operation of other blocks. The new consortium consists of 60% Amodaimi Oil Company (a subsidiary of China’s Sinopec International Petroleum Exploration) and 40% Petrolia (a subsidiary of Canada’s New Stratus Energy). These companies had presented a proposal to the Ecuadorian government since June 2024 to take over the operation of the Sacha Field, also known as Block 60, under a 20-year contract with the Ministry of Energy and Mines.

Located in the Joya de los Sachas canton in the Ecuadorian Amazon, the Sacha Field has been operated by Petroecuador since 1972. However, production has declined due to the deterioration of its 50-year-old infrastructure, further exacerbated by crises and corruption within Petroecuador.

Additionally, the block faces 530 unresolved environmental liabilities and court orders to eliminate 90 gas flares that burn 18 million cubic feet of gas per day, causing severe environmental damage.

The consortium is committed to modernizing the facilities, drilling new wells to boost production, and eliminating the flares by generating energy instead. It is estimated that Ecuador will recover over 370 million barrels of oil, with 80% of the profits going to the state.

According to experts, this participation contract does not imply the sale or transfer of ownership of the resource but rather the delegation of its operation and maintenance—a common practice in other fields such as Auca and Shushufindi.

The state will receive project profits, tax revenues (VAT and income tax), foreign exchange exit taxes, and will generate over 1,000 direct and indirect jobs.

It is essential to remember that in 2008, former President Rafael Correa’s government handed over the Sacha Field – Block 60 to Río Napo, a company owned by Petroecuador and Venezuela’s PDVSA. However, due to failed development and lack of liquidity, it was dissolved in 2016. Since then, all Ecuadorian governments have sought a foreign operator and investor for this block—something that is now finally about to happen.

This agreement represents a turning point in the nationalization policy initiated by Rafael Correa’s administration, which resulted in declining production and inefficiencies at Petroecuador. Private participation aims to revitalize the sector and increase crude oil production.

Ecuador’s current oil production stands at 473,000 barrels per day, far from the 560,000 barrels recorded in 2014, despite the country being among the top five nations with the largest oil reserves in South America.