Ecuador to Revise Down Output Goal by 8% After Force Majeure

 ©Petroecuador (file photo)
©Petroecuador (file photo)

Ecuador will need to revise down its daily crude oil production target by some 40,000 barrels, equivalent to about 8%, its oil minister said, after state-run company, Petroecuador declared force majeure on three more oil blocks on Tuesday because of protests. 

Petroecuador had already declared force majeure on another block over the weekend, also because of protests by a nearby Indigenous community which alleges the company has not kept promises on economic aid, among other issues. 

An earthquake on Saturday had also hit production, damaging [the Amistad] offshore platform.

"I think the goal of 520,000 barrels per day (bpd) that is in the 2023 budget will need to be revised down, in nearly three months of this year we have not reached that level," energy minister Fernando Santos told journalists.

"We have been at 480,000 barrels, without taking into account the events, the natural disasters and social problems," he said. "We will need to lower the production goal."

"Perhaps 480,000 or 490,000 barrels per day for 2023, we need to be realistic," Santos added.

Communities near blocks 16-67, 43-ITT and 61, located in Orellana province, have protested in recent months that Petroecuador has not done enough to contribute to provision of basic services, housing and economic help.

The demonstrations have "impeded the normal functioning of hydrocarbon activities, drastically affecting production, state income and above all putting personnel at risk," Petroecuador said in a statement about Tuesday's declaration.

The three blocks produced a total of about 142,000 bpd on Sunday, with joint production falling to about 122,500 bpd on Monday, according to government figures.

The government is evaluating potential threats, the statement said. The company requested the help of the armed forces to safeguard its installations.

Petroecuador said Block 12, which produces around 29,200 bpd of oil, remained under force majeure since the weekend declaration.

Petroecuador, which produced just over 362,000 bpd on Monday, remains open to dialogue, it said.

More than two weeks of sustained protests by Indigenous groups last year caused Petroecuador to lose nearly 2 million barrels of oil production, the company said then.

 (Reuters - Reporting by Alexandra ValenciaWriting by Julia Symmes Cobb; editing by Grant McCool and Marguerita Choy)

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