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Ecuador unable to comply with Opec quota

17 Jul 2017 19:38 (+01:00 GMT)
Ecuador unable to comply with Opec quota

Houston, 17 July (Argus) — Ecuador's oil minister said the cash-strapped country faces a "difficult economic situation" and is unable to comply with its pledge to Opec to cut 26,000 b/d of oil production.

From January-May Ecuador reduced its output by some 16,000 b/d as part of the agreement among Opec and non-Opec producers to cut production to help drive up crude prices. Oil minister Carlos Perez said today the country is no longer complying with the quota because of its fiscal challenges. These include a public debt close to 50pc of gross domestic product and an expected 7.5pc fiscal deficit for the year.

Perez claimed Ecuador has a non-written agreement with Opec that gives Quito some flexibility. In the last month and a half instead of reducing output, Ecuador has slightly increased it.

Perez said state-owned downstream company PetroAmazonas is now producing about 430,000 b/d and foreign oil companies, such as Spain's Repsol, China's AndesPetroleum and Italy's Agip, are producing another 115,000 b/d. That combined 545,000 b/d is a 2.19pc increase over the production average of the first four months of the year, according to oil regulator Arch.