Ecuador shuts off oil exports after pipeline break
QUITO (AFP) - OPEC member Ecuador on Thursday suspended its oil exports because a landslide cut off its main pipeline, state-run Petroecuador oil company said.
“Exports were suspended and a force majeure was declared to avoid sanctions from our buyers, who already have been notified of the emergency,” an unnamed Petroecuador official told AFP.
Petroecuador said the main Transecuadoran pipeline connecting the country’s oil fields in the Amazon jungle to the port city of Balao was severed by a rain-induced landslide that also took out 70 meters (yards) of a highway near Baeza.
“That situation forced the state-run company to declare an emergency at the pipeline,” a company statement said.
The pipeline, it added, carried 331,200 barrels of oil per day (bpd) in 2007. Another pipeline unaffected by the landslide carried that year 148,800 bpd of heavier crude for private oil companies.
The Petroecuador official said there are enough oil reserves in Balao to meet the country’s demands while the pipeline is under repair.
Ecuador, the smallest producer of the Organization of Petroleum Exporting Countries (OPEC) and number five in South America, extracts some 511,000 barrels of oil per day, of which 67 percent is exported. In 2007 it made 7.43 billion dollars in oil revenues.
Fifty-one percent of Ecuador’s crude oil extraction is owned by the government. The rest goes to Spain’s Repsol-YPF, France’s Perenco, Brazil’s Petrobras and China’s Andes Petroleum.
The foreign oil companies are currently renegotiating their contracts after Ecuador took measures that greatly reduced the extra profits brought by rising crude oil prices.
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