Ecuador oil flow to return to normal in Feb: Update

Adds ministry comment on force majeure status.

Ecuador expects oil production to return to normal levels in February, after its two main export pipelines that had been threatened by recurring land erosion resumed operations.

State-owned PetroEcuador restarted the 360,000 b/d SOTE crude pipeline after a 20-day suspension caused by works designed to prevent damage from the erosion, energy minister Juan Carlos Bermeo said.

A parallel crude pipeline, the underutilized 450,000 b/d OCP owned by a consortium of other producers, is scheduled to restart today. The OCP was initially slated to restart next week, but the company said work on a ninth bypass was completed ahead of schedule.

Bermeo projects that oil field activity will resume in around seven to 10 days as individual wells are evaluated.

Ecuador's crude production on 25 December fell to a nadir of 36,106 b/d, down by 92pc from an average of around 471,000 b/d from January-November 2021, not including storage withdrawals and internal transfers, according to regulatory data. On 27 December, output recovered to 48,829 b/d. Producers other than PetroEcuador, led by China's state-owned Andes Petroleum, registered zero flows on 22, 23 and 25 December.

The closure of the two strategic arteries in early December prompted Ecuador to declare force majeure on its medium and heavy sour exports on 12 December.

"Crude pumping has restarted, but we have to wait until refining and exports also return to normal in order to lift the force majeure", the energy ministry told Argus.

PetroEcuador and the OCP have built multiple bypasses to help safeguard the infrastructure from the advancing erosion of nearby riverbeds.

From January-October the 498km (309mi) SOTE transported around 318,000 b/d of crude to the Pacific coast, according to PetroEcuador data. The 485km OCP transported less than 150,000 b/d before the suspension.

The pipeline shutdowns caused PetroEcuador and other producers to slash oil output and reschedule exports. PetroEcuador also suspended refining at its 110,000 b/d Esmeraldas and 40,000 b/d Libertad refineries.

By Alberto Araujo