LOS ANGELES, May 21, 1999 (PRIMEZONE) -- Occidental Petroleum Corporation (NYSE: OXY) announced today the signing of a new production-sharing agreement and two unified field operating agreements for its 494,000-acre Block 15 in the eastern Oriente Basin of Ecuador.
The new production-sharing agreement replaces a risk-service contract that was signed in 1985 and modified in 1995. The new terms will take effect July 1, 1999.
The new unified operating agreements cover the Limoncocha and Eden-Yuturi fields. Under these agreements, Occidental's oil and gas subsidiary will operate the fields in a "shared management" arrangement with state oil company Petroecuador. Previously, Limoncocha was operated by Petroecuador.
These agreements are an important step in enhancing the value of the company's Ecuadorian assets by improving contract terms, expanding pipeline capacity and reducing operating costs. The new production-sharing contract facilitates the company's participation in a heavy-oil pipeline that will relieve the severe shortage of transportation capacity in Ecuador and will make possible development of Eden-Yuturi and continuation of the company's exploration program in Block 15.
Since acquiring Block 15 in 1985, the company has made six commercial discoveries at Jivino, Laguna, Napo, Indillana, Itaya and Limoncocha that currently produce an average of 16,500 net barrels of oil per day.
Development of the Eden-Yuturi discovery awaits completion of the new heavy-oil pipeline. In 1997, the company's Eden-1 well tested 6,500 barrels of oil per day from four zones with an average gravity of 21-degree API. Estimated gross recoverable oil in this discovery, net of royalties, is 100 million barrels. The company has an 85 percent working interest.
Occidental is the first company in Ecuador -- and only the second oil and gas exploration and production company in South America -- to achieve ISO 14001 certification in recognition of its strong environmental management system. Occidental sought the certification to demonstrate publicly its commitment to environmental protection, to enhance the image of the oil industry in the country and to promote better relations with key stakeholders such as communities, government and nongovernmental organizations.
Note: This press release may contain forward-looking statements that reflect management's expectations and are based upon data available at the time. Actual results are subject to future events and uncertainties that could materially impact performance.