QUITO - Ivanhoe Energy Inc on Wednesday confirmed that it will take part in a consortium to develop heavy oil at Block 20, located in Ecuador's Amazon basin.

On Monday, Ecuador's Minister of Nonrenewable Natural Resources, Pedro Merizalde, said that the Andean country and the Canadian company had decided to terminate a contract signed in 2008 for exploration and production of heavy oil at Block 20, which contains the Pungarayacu oil field.

The minister also said that the government was in talks with China National Petroleum Corp. to develop the block, and didn't rule out having Ivanhoe join with CNPC.

Ivanhoe and the Ecuadorean government agreed to mutually terminate the contract under which Ivanhoe has been operating as a step toward entering into a new service contract with a consortium consisting of Ivanhoe and one of the world's largest national oil companies, which has experience working in Ecuador, Ivanhoe Energy said.

"Ivanhoe Energy fully intends to be part of a consortium that will develop Block 20," the company added.

According to the statement, CNPC currently is reviewing some of its international projects, including Block 20 project, and this review will continue until the end of the third quarter.

According to official data, Pungarayacu contains an estimated 4.5 billion barrels of ultraheavy crude. The contract with the Ecuadorean government covered project appraisal and the development of the block, and included construction of a plant to upgrade the heavy oil using HTL technology.