Innovation: Ecuador exports more oil-related services

Quito, October, 2017.- By transporting light crude oil from Colombia, the heavy crude oil pipeline, OCP Ecuador, has started a change that not only evinces OCP’s capacity to innovate, but also its commitment to the country and the consolidation of the Regional Hydrocarbon Integration. Additionally, this exchange between both countries has permitted OCP to export its crude oil transport services thus generating incoming currency flows and increasing its transport on average by 14 thousand barrels per day of light and heavy oil from Colombia.

The demand for crude oil produced in the Putumayo region of the neighboring country was not being met, which led to the exploration of other options for crude oil transport. Thus, since 2013, OCP Ecuador has transported over 12.5 million barrels of Colombian crude oil through Ecuador and, in February this year, OCP began transporting light crude oil, which, to date, totals 1.3 million barrels of transported crude oil.   

According to Andres Mendizabal, CEO of OCP Ecuador, “the problem we faced was that the OCP was designed to transport heavy crude oil, not Colombia’s lighter crude oil production. Offering to transport this production, without adapting to the customers’ needs, would have been less attractive for producers, because the light crude oil would depreciate when mixed with heavier crude oil.”

To increase the export of oil-related services from Ecuador, OCP was forced to make changes to its transport chain. “The initiative was the result of the company undertaking to satisfy the needs of its customers. Minor modifications in the engineering and the Lago Agrio facilities were made in order to achieve optimal transport of light crude oil with no loss in quality,” explains Guillermo Freire, Business and Crude Oil Movement Manager for OCP Ecuador.  

Impact on the community

“Somewhere between 80 and 100 tank trucks cross the border daily. This traffic has resulted in the generation of jobs in logistics, maintenance and transport, as well as the provision of food and other services to those persons working in this area,” says Freire.

According to Lago Agrio’s mayor, Vinicio Vega, the increase in economic activity has been vital since the introduction of oil-related services export, as it has brought about the creation of direct and indirect jobs. Likewise, the project will help to increase tourism as the highway, now in the final construction stages, will reach the PERLA Park —also built by OCP Ecuador for the Community several years ago.

In terms of construction, in addition to the above highway, a 4.5 kilometer road for the city of Lago Agrio, at a direct investment by OCP totaling 2.7 million dollars, is slated for completion in February 2018, and the repaving of another city road for an additional investment of 700 thousand dollars is underway.

“The Colombian market’s response has been very good, which, a few months back, translated into the first shipment of Colombian crude oil exported through Ecuador,” Mendizabal remarks. Nowadays, a little over 14 thousand barrels of crude oil from Colombia are transported daily. This is a significant step up from the first tests conducted in 2013, in which, on average, three thousand barrels a day were transported.