Ecuador has declared force majeure on crude exports as a result of weather-related ruptures on its two main crude pipelines this week, but two loadings are still possible over the next 25 days, oil minister Rene Ortiz said today.
State-owned PetroEcuador's 360,000 b/d Sote pipeline will take two to three weeks to repair, while the private-sector 450,000 b/d OCP line will take three to four weeks, Ortiz said. He highlighted that the required spare parts are in stock to facilitate the repairs of the crude lines in addition to a products pipeline that was also knocked off line by torrential rains and mudslides.
Ecuador's crude production has fallen to close to 224,000 b/d, Ortiz said. He stressed that there would not be a "complete shutdown" of output at most fields. Ecuador produced around 521,000 b/d of crude in March, according to data from oil regulator Arch.
The reduced production will top off storage at the Pacific port of Balao to allow one tanker to load in the next few days, Ortiz said. Another tanker could load at the Colombian port of Tumaco in 20-25 days, if a 20,000 b/d cross-border link from the Sote line to neighboring Colombia's 85,000 b/d Transandino pipeline can be rehabilitated, Ortiz said.
There was no immediate comment from Colombia's mines and energy ministry, or Colombian state-owned Ecopetrol, regarding the pipeline spur.
Ecuador exports medium sour Oriente and Napo crude under oil-backed debt contracts with Asian clients, in addition to quarterly spot sales. PetroEcuador's last spot tender for Oriente went unawarded in late March.
A 'firm' deal
Ortiz, who served as Opec secretary-general from 1979-1981, expressed optimism that today's G20 meeting will add weight to yesterday's tentative Opec+ agreement. He said another 5mn b/d cut from "Opec++" countries could emerge from the G20 talks, on top of the 10mn b/d reduction agreed by the Opec+ countries.
"Today we hope (oil) markets perceive the firmness of the agreement," he said, alluding to the medium-term character of the Opec+ deal.
Ecuador withdrew from Opec in January as part of austerity measures implemented by the government of President Lenin Moreno.
Ortiz reiterated that Ecuador has ample supply of refined products in inventory to cover demand during the repair of a fluid catalytic cracking (FCC) unit at the 110,000 b/d Esmeraldas refinery, which also broke down this week following a power outage. He described the damage at a compressor in the FCC as very serious.
