HOUSTON, Oct. 11 -- Conoco today announced it will
withdraw from the Block 16 oil development in Ecuador.
Conoco's affiliate, Conoco Ecuador Limited, serves as
operator of a group of companies under a risk-service contract
with Petroecuador, Ecuador's national oil company. The group
discovered five fields on Block 16 in Ecuador's Oriente region
and submitted a plan for their development to Petroecuador in
1989. That plan was approved by the Ecuadorian government on
September 20, 1991. Other members of the group are planning
to go forward following Conoco's withdrawal.
Conoco President and CEO Constantine S. Nicandros said:
"This was axdifficult decision because it is a good pro-
ject and one on which our people worked very hard and
very well to discover oil and plan for its development.
But we simply have more good projects to do than our
capital resources can cover. It is on this basis that
Conoco decided to withdraw from the Block 16 project --
and from the adjacent Block 22 as soon as possible.
"I am especially proud of the Conoco Ecuador team, who
have provided Ecuador with the plan for a modern, first-
class oil development. They will leave a positive envi-
ronmental legacy: a comprehensive environmental manage-
ment plan and a model for establishing open dialogue and
involvement of concerned groups in the planning process.
Although Conoco will not be involved in the development
of Block 16, the Conoco Ecuador plans provide a road map
for safe, environmentally responsible projects of this
type.
"I salute those interest groups and individuals who saw
the value of a continuing, constructive dialogue. I
urge them to maintain this positive relationship with
the future Block 16 operator and to seek ways to work
with all governments and companies to encourage environ-
mentally responsible development worldwide."
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CONOCO ECUADOR LIMITED - BACKGROUND INFORMATION
In early 1986, Conoco Ecuador Limited was organized to search for
petroleum in Ecuador Block 16, located in the Oriente region of
that South American nation. That search was conducted as a
contractor to the state oil company, Petroecuador (formerly
CEPE).
Using helicopter airlift of equipment into the rain forest, eight
exploratory wells were drilled in 1987 - 1989. This effort
resulted in five discoveries of exploitable oil. In accordance
with its risk-service contract, Conoco Ecuador filed a plan with
the government in late 1989 to develop those five oil fields.
Also prepared was an environmental management plan that responds
to special concerns related to responsible oil development in a
rain forest and to the sensitivities of the people who live in
that environment. Those plans were approved by the Ecuadorian
government on September 20, 1991. Conoco Oriente Limited -- a
separate organization but with the same partners as Conoco
Ecuador -- was the successful bidder in 1990 for rights to
negotiate a contract to look for oil in the adjacent Block 22.
Those negotiations have not been initiated, and Conoco will
withdraw from this block as soon as possible.
Conoco Ecuador actively developed an open dialogue with inter-
ested organizations and individuals concerning its oil devel-
opment plans. That effort included one-on-one meetings with the
leaders of non-governmental organizations (NGOs) and indigenous
people groups both in Ecuador and across the United States.
NGOs, indigenous people, scientists, government officials and
Conoco Ecuador representatives also met in forums to discuss
development plans and concerns those plans raised. Much of the
knowledge gleaned from these sessions was incorporated in the
Block 16 environmental management plan. That plan addresses not
only concerns about prevention of pollution and the impact of
road construction but also speaks to strategies to prevent
harmful indirect impacts such as illegal colonization and cultur-
al stress on indigenous people. Conoco Ecuador also developed
plans with various scientific organizations to accommodate rain
forest research projects in conjunction with road construction
required in the Block 16 development.
Block 16 partners are:
Conoco Ecuador Limited (operator) Maxus Ecuador Inc.
Houston, Texas Dallas, Texas
Overseas Petroleum & Canam Offshore Limited
Investment Corporation New Orleans, Louisiana
Taiwan, Republic of China
Nomenco Ecuador Oil Company Murphy Ecuador Oil Company
Jackson, Michigan El Dorado, Arkansas
# # # #
10/11/91
Larry Springer
Conoco Inc.
MA 3032
PO Box 2197
Houston, TX 77252