Ecuador lifts the “force majeure” cause after recovering its oil production

RIO DE JANEIRO, BRAZIL – The Government of Ecuador announced on Wednesday that it is lifting the “force majeure” cause it applied last December 12 to suspend crude oil exports due to works in two oil pipelines threatened by a natural erosion phenomenon.

The Ministry of Energy issued a resolution by which it lifted the “force majeure” situation, declared for the paralyzation of the oil pipelines threatened by the regressive erosion in the Piedra Fina river, in the Amazonian province of Napo, near where the pipelines pass.

This resolution was issued once the state-owned Sistema de Oleoducto Transecuatoriano (SOTE) and the privately-owned Oleoducto de Crudos Pesados (OCP) resumed operations the end of December, which in turn allowed the recovery of production in the extraction fields in the Amazon

The two pipelines “are technically operative for the reception and transport of crude oil from the stations located in Lago Agrio (Amazon) to the export terminals in Esmeraldas (Pacific Ocean coast)”, said the Ministry.

Both the state-owned oil company Petroecuador and the private company OCP-Ecuador built some variants in the route of their pipelines in the area of the Piedra Fina river, affected by landslides due to erosion.

The lifting of the “force majeure” causes will allow resuming the scheduled transportation of oil from the Amazon to the shipping ports in the coastal area, restart crude exports, and “comply with the contractual clauses, guaranteeing legal security”, added the source.

The process of regressive erosion in the area of El Reventador volcano, through which the Piedra Fina river passes, began to be registered in 2020. Since then, Petroecuador and OCP have built some variants to re-route the pipeline.

The resumption of SOTE operations will also allow the resumption of operations at the “Esmeraldas” and “La Libertad” refineries, both in the coastal area, affected by the cut in crude supply.

With a daily production of some 530,000 barrels, under normal conditions, Ecuador’s oil exports are one of its primary sources of foreign currency income and financing for its state budget.