The Government has decided not to renew the association contract of Flopec (public company) with the private Amazonas Tanker. This was indicated by the Minister of Energy (e), Roberto Luque, in dialogue with Diario EL UNIVERSO. “I must be emphatic that this contract is not going to be renewed in any way,” said Luque when asked about the status of that contract, which expires next November.
The partnership between Flopec and Amazonas Tanker has been controversial. Both companies use Aframax and Panamax boats, but they do not own them all, but rather rent them. On the one hand, this contract was at the center of the debate when the impeachment trial was held against former president Guillermo Lasso, for alleged embezzlement; But it has also been criticized because the high rates charged through Flopec have made freight more expensive and end up damaging Petroecuador’s crude oil differential.
Last February, Amazonas Tanker already received notification of contract termination. But in the clauses there was a possibility of renegotiating the conditions. However, now the minister makes it clear that said contract will be definitively void.
Minister Luque, on the other hand, justified Flopec’s latest decision that forces Petroecuador to transport crude oil through Aframax and Panamax, for which a contest for 15 million barrels of Oriente crude oil was defeated, with a prize, but which would be done through suezmax ships (larger, with more convenient rates, but which Flopec does not have). At one time it was thought to be a measure to benefit society with Amazonas Tanker.
However, the minister said that what was sought with this change in rules is an equation that favors the State and not only Flopec, Amazonas Tanker, or not only Petroecuador. He also commented that the change was made because the contract for 15 million barrels of crude oil committed exports for seven months, practically the entire duration of Daniel Noboa’s government. He also commented that he was not sure that contract would have been beneficial to the country over that time.
“They wanted to commit to an issue for seven months that we don’t know if it will be more beneficial for the State. It may be that in a short period (…) it turns out that it is, because in Aframax and Panamamax it is not enough for us at this moment.” He acknowledged that the numbers were favorable for Petroecuador due to the premium that would be received in Suezmax, but assured that the other side of the equation, which is Flopec, is not clear. “Since we entered, I participated in that tender, but it was not fully supported that it would be more beneficial.”
He also explained that Flopec could hire Suezmax for its operation and thus not lose the possibility of income from transportation. And that this work of reviewing the data is going to be done independently of any pool, mechanism, type of ship. The objective is to maximize State income.
Likewise, he said that the slogan is that, when these contests or tendersPetroecuador and Flopec coordinate among themselves and that Petroecuador previously explains which ships it needs to coordinate with Flopec.
When asked if it seemed like a good deal to have left aside the contract that came with a premium and that would have meant a better differential for the country, he commented that it is not known what that differential would be. “You have to be careful in what you say or say about losses, because Petro’s loss could be someone else’s gain. The data, and that is what we are working on now, will allow us to go into detail and what is the best equation for Ecuador to win,” he said.
In the previous contest, which proposed selling more than 15 million barrels of Oriente crude oil, the formula that was going to be applied for the final price was PF = WTI – $ 4.94 (differential) + premium. In that contest, 2.16 million barrels were going to be placed in June.
In the new contest, for 3.6 million barrels the final price will be PF = WTI – $5.47 (no prize). If we take into account that, according to the behavior of other premium sales, these premiums could be around $2 per barrel, it is calculated that the difference, comparing the contest that was canceled with that of this 30 May, it would be $2.48 per barrel.
According to the figures managed by Amazonas Tanker, the average earnings figures in the Flopec operation increased between December 2020 and May 2024: while in December 2020 they received $37,441 per day, in May 2024 it had risen to $100,000. This especially due to the increase in rates. In this period, the worst month recorded was August 2021, with $19,109 in profits; while the highest value was recorded in December 2022, with $137,460. The directors of Amazonas Tanker have commented that in that same period Flopec has received $343 million. (YO)
Source: The Universe
