QUITO (Reuters) - Ecuador has abandoned for now a plan to ask OPEC for an exemption from its share of the organization’s oil production cut as crude prices are reacting positively to the group’s measures, the country’s oil minister said on Thursday.
Ecuador, one of the smallest producers in the Organization of the Petroleum Exporting Countries, said last month that it would request an exemption from the joint output cut when the group meets in Vienna later this month. It said then that it could even consider leaving the cartel for two years to avoid reducing its production.
“For now we are not going to submit the request. We’ll analyze along with OPEC’s members which alternatives they can offer. To sustain prices, we have to support OPEC’s measures, which are so far succeeding,” minister Carlos Perez said during a press conference.
OPEC, Russia and nine other producers plan to meet on Nov. 30 to decide whether to extend a 1.8-million-barrel-per-day (bpd) cut beyond March in an attempt to eradicate a supply glut that has weighed on oil prices.
The price of West Texas Intermediate Crude, a reference for many Latin American grades, has increased 23 percent since mid-June to trade above $55 per barrel.
The Andean country is facing a large fiscal deficit due to low oil prices and a devastating earthquake last year, and needs to boost oil production as much as it can to finance rebuilding.
Ecuador produced 541,000 bpd last month, according to secondary sources quoted by OPEC in its most recent report. That was above its allocation of 522,000 bpd. Perez said Ecuador’s compliance level was between 60 and 70 percent.
Other members, including Venezuela and Qatar, have been producing below their targets in recent months, according to data reported to OPEC, opening opportunities for producers to slightly increase output.
Perez also said Ecuador continues negotiating with China’s PetroChina and Unipec and Thailand’s PTT PCL to change the terms of oil-for-loan agreements signed by the country.
“Today I received letters from PTT and Unipec saying they are willing to solve the issues. We have not yet reached an agreement, but we have opened the door for sitting down to negotiate,” Perez said.
In the meantime, commercial relationships with these firms have not been suspended, the minister said, adding that Ecuador is seeking to avoid supply contracts being declared unfulfilled.
“The country must be very cautious about that,” Perez said.
Perez also said that major repairs at the Esmeraldas refinery’s fluid catalytic cracker (FCC) are scheduled to start in March.
Reporting by Alexandra Valencia; Writing by Marianna Parraga; Editing by Alistair Bell and Rosalba O'Brien