QUITO, Nov 9 (Reuters) - Ecuador expects its crude output to end 2020 “significantly” below initial expectations due to budget cuts at state oil companies and the rupture of two key pipelines earlier this year, Energy Minister Rene Ortiz said on Monday.
The government had estimated output of 543,000 barrels per day (bpd) of crude in its 2020 budget, but Ortiz told a local radio station that production would close the year at 480,000 bpd. Crude output of the South American country in 2019 averaged some 531,000 bpd, official data show.
“It is enormous and difficult to overcome - it will take time and money,” Ortiz said in a separate interview with local television channel Teleamazonas.
The coronavirus pandemic has hit cash-strapped Ecuador’s government revenue, resulting in a $600 million cut to resources dedicated to oil production, Ortiz said.
In addition, Ecuador declared force majeure on oil exports in April after the state-run SOTE pipeline and privately held OCP pipeline burst due to a landslide in the Amazon region, forcing a temporary cut to crude production.
The drop in output has complicated Ecuador’s ability to comply with its long-term sales arrangements with China and Thailand, and Ortiz said Ecuador was seeking to renegotiate delivery schedules with the two customers.
Ortiz also said that the board of state oil company Petroamazonas, which produces the bulk of the country’s crude, had named engineer Franklin Paredes as its chief executive, following the resignation of Juan Carlos Bermeo last month. Ortiz said Paredes will be tasked with boosting output. (Reporting by Alexandra Valencia Writing by Luc Cohen Editing by Leslie Adler)
Our Standards: The Thomson Reuters Trust Principles.