As first announced in August 2014, Ivanhoe and Petroamazonas agreed to a process to mutually terminate the Specific Services Contract under which Ivanhoe has been operating since 2008 as a step towards entering into a new Service Contract with a consortium consisting of Ivanhoe and one of the world’s largest national oil companies (NOC), which has experience working in Ecuador. Ivanhoe has worked closely with Petroamazonas and officials from the Ecuadorian government in terminating the contract according to Ecuadorian law, and the company has fulfilled all of its termination responsibilities.
On January 21, 2015, Ivanhoe Energy announced that it is scaling back its activities in Ecuador in response to significantly lower oil prices and a delay in discussions with Ivanhoe’s partner on moving ahead with development plans for Ivanhoe’s Block 20 heavy-oil project. While oil price volatility makes it challenging to move Block 20 forward in the short term, Ivanhoe remains willing to work with its partner and the Ecuadorian government to explore development alternatives for Block 20 over the medium and longer term.
