Ecuador - Block 20
The Pungarayacu Project is governed by a contract signed by Ivanhoe Energy Ecuador Inc. with Petroecuador and Petroproduccion in October 2008. The contract is a 30-year Specific Services Contract, extendable for up to 10 years. Under this contract, Ivanhoe Energy Ecuador has the exclusive right to explore, develop and produce oil in Block 20, using its unique and patented HTL process for production from heavier oil reservoirs.
- To recover its investments, costs and expenses, and to provide for a profit, Ivanhoe Energy Ecuador will receive from Petroproduccion a payment of US$37.00 per barrel of oil produced and delivered to Petroproduccion.
- This payment will be indexed (adjusted) quarterly for inflation, starting from the contract date, using the weighted average of a basket of three U.S. Government-published producer price indices relating to steel products, refinery equipment and upstream oil and gas equipment.
- Ivanhoe Energy Ecuador may elect to receive its payment in oil, based on market prices, delivered to Ivanhoe at a Pacific Coast terminal.