Ecuador lifts declaration of force majeure

The government of Ecuador has lifted a declaration of force majeure on exports of crude via the country’s two main pipeline systems, the Trans-Ecuadorian Oil Pipeline System (SOTE) and privately-owned Heavy Crude Pipeline (OCP).

Energy Minister Juan Carlos Bermeo made a formal announcement on Quito’s move to end force majeure on January 6, saying that the oil industry had taken sufficient action to mitigate the threat of soil erosion that led to the shutdown on December 13. “The ministry’s decision to lift the force majeure provides for the restoration of normal operating conditions for transporting crude oil in the country, which has allowed us to recover very important production volumes,” he said in a statement.

Oil exports have resumed, he added.

In the statement, the Energy Ministry noted that Ecuadorean oil production had climbed back to 449,000 barrels per day as of January 6, equivalent to 93% of the 485,000 bpd reported before the imposition of force majeure last month. Petroecuador, the national oil company (NOC) of Ecuador, accounted for about 77% of the total, or 346,000 bpd, while private operators accounted for the remaining 23%, or 103,000 bpd.

This represents a more than 12-fold increase on the daily low of 36,106 bpd reported on December 25. According to previous reports, Petroecuador had to reduce output significantly during the shutdown because it did not have adequate storage capacity without access to SOTE.

The NOC is the owner of the SOTE system, which has a throughput capacity of 360,000 bpd. OCP, meanwhile, is owned by a group of private companies. It has been handling around 180,000 bpd but has a design capacity of around 450,000 bpd.

The pipeline shutdown also halted oil shipments to Ecuador’s refineries. As of January 6, though, deliveries to the 20,000 bpd Shushufindi plant and the 110,000 bpd Las Esmeraldas plant had reached normal levels again, and shipments to the 45,000 bpd Libertad plant were slated to follow suit as of January 9.