The Ecuadorian government canceled the delegation of Campo Sacha oil field to the Sinopetrol consortium on March 11, 2025.
President Daniel Noboa set a firm deadline of 9:00 PM for the consortium to pay a $1.5 billion premium required for contract signing. Sinopetrol failed to meet this condition despite claiming they were making every effort to secure the funds.
The Chinese-Canadian consortium faced a significant challenge when Noboa shortened their payment timeline. Ramiro Páez, legal representative for Petrolia Ecuador, expressed frustration about the tight deadline.
“We had to secure in one week what was originally planned for 30 business days,” Páez explained shortly before the deadline expired. Campo Sacha represents Ecuador‘s most productive oil field, currently yielding approximately 75,000 barrels daily.
The agreement would have delegated operations to Sinopetrol for 20 years under a production-sharing contract. The consortium planned to invest $1.75 billion over this period, with 80% allocated within the first five years.
Ecuador Cancels $1.5 Billion Campo Sacha Oil Field Deal After Sinopetrol Misses Payment Deadline. (Photo Internet reproduction)
The deal sparked considerable controversy throughout Ecuador since its announcement during Carnival holiday weekend. Ecuador’s opposition-controlled National Assembly strongly opposed the arrangement from the start.
Ecuador’s Controversial Oil Contract and Its Implications
Critics argued the contract terms favored the consortium excessively, potentially costing Ecuador around $8 billion. Under the proposed terms, Sinopetrol would have received 82% of oil production while the government retained just 18%.
Government officials defended these percentages, stating that taxes and other contributions would ultimately deliver $530 million annually to state coffers. Oil workers’ unions disputed this calculation, claiming Sacha currently generates $1.7 billion in yearly net revenue.
The Sinopetrol consortium united Amodaimi Oil Company, a subsidiary of Chinese state-owned Sinopec controlling 60%, and Petrolia Ecuador, subsidiary of Canadian New Stratus Energy holding 40%.
Their plan aimed to increase production to 100,000 barrels daily by investing in infrastructure recovery and reactivating wells. Energy Minister Inés Manzano confirmed the government will now explore alternatives for Campo Sacha’s development.
Petroecuador will continue operating the field while officials evaluate future options. Noboa’s administration reportedly needs immediate funds to address nationwide flooding emergencies and security challenges.