Ecuador oil flow drops for second year in a row

Ecuador's oil production fell for a second consecutive year in 2021 as the former Opec country grappled with recurring erosion that has hamstrung pipeline transport.

Last year's oil output averaged around 448,578 b/d, down by 2.4pc from the 2020 average of 459,609 b/d, according to regulatory data. The data from regulator ARC does not include storage withdrawals and internal transfers.

The 2020 output fell by 9.9pc from the 2019 average of 510,263 b/d.

The back-to-back downturns reflect the repeated closures of Ecuador's SOTE and OCP export pipelines, which both ruptured from the advancing riverbed erosion and mudslides in April 2020.

State-owned PetroEcuador that runs the 360,000 b/d SOTE line and a consortium of foreign producers that runs the 450,000 b/d OCP line have built multiple bypasses to safeguard the infrastructure from the natural phenomenon.

Last month Ecuador declared force majeure in the face of another flare-up in the erosion, shutting some 3,000 wells and PetroEcuador's two main refineries.

Ecuador produced 206,869 b/d of crude in December 2021, not including storage withdrawals and internal transfers, down by 58pc from a year earlier and by 56pc from the January-November 2021 average of just over 471,000 b/d, according to data from energy regulator ARC.

Energy minister Juan Carlos Bermeo said yesterday in a locally broadcast interview that 800 of the shuttered wells are operating again.

"We hope that in the following days we'll have a full recovery of crude production, transport and exports," said Bermeo.

The government has previously said that crude production would not return to normal levels until February.

Ecuadorian president Guillermo Lasso, who took office last year, had vowed to boost production to 1mn b/d by 2025. But the recurring crises mean the country is unlikely to reach that target for another five to seven years, he now says.

By Alberto Araujo