Petroecuador EP will absorb Petroamazonas EP, according to the decision of the Boards of both companies

This Ministry of Energy and Non-Renewable Natural Resources release was published using machine translation.

The unified Company will operate from January 1, 2021 and will respect all the obligations and contractual commitments acquired by the two Companies.

Minister René Ortiz bases the entire fusion process on an expression by Albert Einstein: "If you are looking for different results, don't always do the same thing."

In order to comply with Decree 723 of April 24, 2020, issued by the President of the Republic, Lenin Moreno Garcés, today - in three meetings followed by a joint Joint Technical Commission, the Board of Petroecuador and the Board of Petroamazonas - carried out in Quito, it was resolved to approve that the Petroecuador EP absorbs Petroamazonas EP, thus unifying the value chain of the oil business composed of the exploration, exploitation, transportation, refining and commercialization of hydrocarbons.

The Minister of Energy and Non-Renewable Natural Resources, René Ortiz, explained the following points about this unification process, which begins on August 28, 2020 and that the President of the Republic has been informed:

1.- This first phase in the unification process would not necessarily imply immediate dismissal of the personnel, even though there would be special situations of redundancy, which could be taken into consideration, always in accordance with the Organic Law of Public Companies, the Code of Labor and current legal regulations.

2.- The process is part of Decree 723 of April 24, 2020, which makes the Minister of Energy and Non-Renewable Natural Resources responsible for merging the two companies until December 31, 2020.

3.- The status report of the Temporary Merger Unit (UTF), with cut-off to August 24, 2020, presented today during the three sessions: the joint and the Board sessions of EP Petroecuador and Petroamazonas EP respectively, showed an important advance in the unification process with the work of 11 Governance operating commissions of the two institutions that have been working on the process every week, namely: Finance; Planning and Control Management; Technology; Logistics and Supplies; Human Resources; Safety, Health and Environment; Community Relations; Physical security; Legal Management; Image and Business Communication; and the Operational Coordination (Exploration, Production, Transportation, Refining, International Trade, National Trade and Operational Programming), which have held meetings permanently and in the sessions that the Minister has held with the UTF Manager and part of his team.

4.- It is expected that the new company, resulting from this merger, will start operating from January 1, 2021 and assume all the commitments of the two merged companies: rights, obligations, equity, assets and liabilities, competences, payroll of the personal, among others; and that all contractual obligations and commitments acquired by the two companies are respected, which will remain in force, in this transition period, until December 31, 2020.

5.- Likewise, the new company will expand its scope of management towards processes related to petrochemicals and the development of geothermal energy within the framework of the principles of reducing greenhouse gas emissions, including CO2, within the global process of climate change.

6.- The Minister of Energy knows that in the majority of the personnel and workers of the two companies a high degree of ethics is rooted, worthy of being rescued and that combined with the mystique of work, this merger will be carried out in an orderly manner.

“The Ministry of Energy and Non-Renewable Natural Resources, the Coordinating Company of Public Companies EMCO EP, the Agency for the Regulation and Control of Energy and Non-Renewable Natural Resources, together with the management of Petroamazonas EP and EP Petroecuador, will execute the legal actions and administrative procedures that ensure an orderly implementation of the modifications that must be made in the structure and management models of the new energy company, which are known worldwide as energy companies (beyond oil) ”, assured the Minister of Energy, René Ortiz .