Unrest forces Ecuador to curtail oil output

Market: Crude oil, Oil products
08/10/19

Crude production in three Ecuadorean fields operated by state-owned PetroAmazonas was halted yesterday amid protests that President Lenin Moreno blames on political opponents.

Roughly 12pc of 545,000 b/d of production has been affected, according to an oil ministry report issued late yesterday.

Well shut-ins and roadblocks have forced state-owned PetroEcuador from producing and evacuating about 45,600 b/d from the Sacha field on block 60 in Orellana province, the ministry said. At the Auca field on block 61, also in Orellana, PetroAmazonas shut in about 9,050 b/d and Ecuadorean independent Petrobell halted another 3,000 b/d.

On block 57 in Sucumbios province, PetroEcuador was forced to close a power plant, suspending output from the 5,600 b/d Libertador field.

The Ecuadorean military has stepped up security around oil installations as the unrest grinds on. The protests erupted last week after the government lifted fuel subsidies as part of an austerity package coordinated with the International Monetary Fund (IMF).

In a national address, Moreno blamed his exiled predecessor Rafael Correa and Venezuelan president Nicolas Maduro for instigating violence with the goal of overthrowing his government. Moreno took office in 2017 and quickly broke with Correa, his former political ally, after uncovering widespread corruption, including tainted contracts to repair state-owned PetroEcuador's 110,000 b/d Esmeraldas refinery. One of Moreno's boldest moves was the October 2017 arrest of powerful former vice-president Jorge Glas. Correa led the country for a decade until Moreno took office in May 2017.

According to Ecuador's oil regulator ARCH, crude production nationwide averaged just over 542,000 b/d on 6 October, down from 545,000 b/d the previous day. It is not clear if the one-day decline was caused by the unrest.

PetroAmazonas accounts for about 80pc of national production, following by Chinese state-owned Andes Petroleum, Chile's state-owned Enap and Spain's Repsol.

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