Ecuador to cut oil output to match Opec cap
Quito, 3 January (Argus) — Ecuador's crude production will be cut to 520,000 b/d in 2018, a 2.07pc drop from 2017, in order to comply with the country's Opec reduction quota, deputy oil minister Patricio Larrea told Argus.
The smallest Opec member's sacrifice deepens considering that Ecuador had already reduced its crude production in 2017 by 2.87pc to some 531,000 b/d, down from 546,744 b/d a year earlier, according to data from oil regulator Arch.
Before Opec's 30 November meeting, Ecuador had relinquished its plan to request an exemption from further crude output cuts or a two-year license from Opec in order to be able to increase its crude production. The moves were being considered to help offset growing public debt, a widening fiscal deficit and weak economic growth.
Recovering WTI prices led Ecuador to reduce its initial output target of 538,356 b/d in 2018, but the country has not deserted its goal to boost production to 700,000 b/d by 2021 by developing the vast Ishpingo-Tambococha-Tiputini ITT heavy-crude complex and opening new oil projects to the private sector.
Despite the output cuts, state-owned PetroAmazonas is on track to increase production by 25,000 b/d in 2018 to some 450,000 b/d, according to the company's chief executive Alex Galarraga.
PetroAmazonas' output will grow driven by the development of the ITT complex, which holds an estimated 1.7bn bl of 14˚-15.5˚API reserves.
Tiputini currently produces 50,000 b/d. The firm is preparing to drill at Tambococha, which could start producing in 2018. By 2019 PetroAmazonas plans to launch drilling at Ishpingo.
Cash-strapped Ecuador expects an annual income of $2.3bn through 2030 by tapping ITT.