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Novak says Ecuador should limit production: Update

26 Oct 2017, 8.32 pm GMT

Novak says Ecuador should limit production: Update

Adds response from Ecuador´s oil minister.

Quito, 26 October (Argus) — Ecuador´s withdrawal from the current Opec/non-Opec crude production deal would be negative to the agreement as it needs the full commitment of all participating countries, Russian energy minister Alexander Novak said today in a television interview.

"We think (Ecuador´s withdrawal) will not be good, because all countries are committed to fulfilling the agreement and we need to bring it to a logical end, to decrease oil stocks and rebalance oil demand and production," Novak said.

In response to Novak´s remarks, Ecuador´s oil minister Carlos Perez told Argus today: "Ecuador supports Opec's efforts and is open to take all opinions into consideration, but we will make a decision that benefits our country. We must consider Ecuador's (financial) needs."

Ecuador will submit a request to Opec to be spared from any potential output cuts agreed in the organization's next meeting on 30 November, but if this proposal is not successful the country will ask for a two-year license, Perez told journalists in Quito today.

Ecuador is a marginal producer whose output does not affect Opec, Perez has previously said.

Ecuador produced 534,400 b/d in January-September, 12,400 b/d above its Opec target. The country aims to increase production by nearly 5pc to 562,700 b/d next year from 537,000 b/d in 2017, finance ministry projections show.

"We hope that all countries will be committed to the agreement until its end...," Novak said in today´s broadcast. The Opec/non-Opec deal, which was implemented in January for an initial period of six months, was extended by another nine month and is due to end in March 2018.

Novak reiterated it was too early to take a decision on a further extension of the agreement. "It is important to see how demand and oil stocks will change in the winter period," he said.

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