June 3, 2013 / 10:26 PM / 5 years ago

UPDATE 1-Ecuador's Petroecuador declares force majeure on crude exports

By Alexandra Valencia

QUITO, June 3 (Reuters) - Ecuador’s state-run oil company Petroecuador on Monday declared force majeure on crude oil shipments due to the breakage of the country’s largest pipeline last week.

The SOTE pipeline, which was carrying 309,000 barrels per day (bpd) of crude oil, suspended operations on Friday morning after a section burst due to a landslide. The pipeline has capacity to transport up to 360,000 bpd.

Petroecuador’s General Manager Marco Calvopina told reporters the company will need to reschedule three contracts with Petrochina, each of which call for the supply of 360,000 barrels.

He said Petroecuador has asked Petrochina to take the oil before the agreed delivery date because more storage space is needed at the Esmeraldas port as normal production has continued despite the pipeline break.

Petroecuador said the SOTE pipeline could be back online on Monday night at around 10:00 p.m. local time.

“The force majeure will be lifted when the SOTE starts operation again ... that could happen tomorrow,” Calvopina said.

Petroecuador estimates that some 10,000 barrels of crude were spilled when the pipeline broke and that some of the oil may end up in the Napo river. Calvopina said authorities in Brazil and Peru have been informed that some crude oil could arrive in those countries through rivers.

SOTE transports mainly crude oil produced by Ecuador’s largest oil company, state-run Petroamazonas, which aims to produce 325,000 bpd on average this year.

Calvopina said the country’s second largest pipeline, the OCP, has been transporting an additional 120,000 bpd to ports since the SOTE broke.

OCP is a 475-kilometer (300-mile) pipeline with a capacity of up to 450,000 bpd that links oil fields in the eastern Sucumbios region to the Pacific coast. The pipeline usually transports around 150,000 bpd.

Ecuador, OPEC’s smallest member, last year produced an average of 504,000 bpd.

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