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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Petroecuador (Quito, Ecuador) aims to return to normal operations by the end of July after national strikes and unrest across the country impacted oil production. Energy operations were affected by 18 days of national unrest and strikes by indigenous groups who were demanding better living conditions and protection from the Ecuadorian government.
As a result of the protests, Petroecuador lost about 2 million barrels of oil production due to the shutdown of 959 wells in oil fields located in the northern provinces of Sucumbios and Orellana, according to a statement by the oil company. During the 18 days of protests, Petroecuador's oil production was halved, resulting in a loss of US$513 million.
The northern provinces are home to some of the largest oil fields in the country. Nevertheless, these areas have consistently been affected by protests and unrest. For example, in May 2021, indigenous groups blocked the entrance to Petroecuador's Block 12, leading to operational disruptions and requiring the army's involvement.
Nevertheless, Petroecuador reported that by July 3, oil production had recovered to more than 70% of capacity after dropping below 200,000 barrels per day (BBL/d) by the end of June. Petroecuador said it expects oil operations to reach 90% of production capacity this week, and pre-protest output by the end of July.
Downstream, midstream and exports
As a result of the protests, the 115,000-BBL/d Esmeraldas refinery was operating at 70% as of July 4, although it was expected to reach full processing capacity in the next few days. Nevertheless, Petroecuador said it had high stocks of gasoline and diesel, due to the operation of the 20,000-BBL/d Shushufindi refinery.
The midstream sector also was affected by the unrest, leading to lower pumping levels across the 500-kilometer SOTE pipeline. The pipeline moves oil from Ecuador's northern oil fields to the country's ports on the Pacific coast. The transport of heavy-sour Oriente grade crude oil is expected to resume to normal levels.
The output disruptions led to delays in exports of Oriente crude oil, although shipments of heavy-sour Napo-grade crude oil remained stable, according to Petroecuador.
Political agreement
The unrest that brought Ecuador to a halt and led to losses estimated at $1 billion ended with an agreement between the government of President Guillermo Lasso and the indigenous organizations. As part of the negotiations, the administration will enact policies targeting the protesters' demands.
The agreement includes the reduction of gasoline prices, limitations on private investments in Petroecuador's operations and the reform of a mining decree introduced by Lasso. However, these changes will hamper Lasso's goal of doubling oil production to 1 million BBL/d and increasing mining operations under his tenure.
New negotiations between the government and indigenous groups will begin on July 7.
Industrial Info is tracking more than 120 active Petroecuador projects, worth more than US$895 million, and 43 operational plants. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production, Pipelines and Terminals project databases can click here for a list of detailed project reports and click here for a list of operational plant profiles.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
As a result of the protests, Petroecuador lost about 2 million barrels of oil production due to the shutdown of 959 wells in oil fields located in the northern provinces of Sucumbios and Orellana, according to a statement by the oil company. During the 18 days of protests, Petroecuador's oil production was halved, resulting in a loss of US$513 million.
The northern provinces are home to some of the largest oil fields in the country. Nevertheless, these areas have consistently been affected by protests and unrest. For example, in May 2021, indigenous groups blocked the entrance to Petroecuador's Block 12, leading to operational disruptions and requiring the army's involvement.
Nevertheless, Petroecuador reported that by July 3, oil production had recovered to more than 70% of capacity after dropping below 200,000 barrels per day (BBL/d) by the end of June. Petroecuador said it expects oil operations to reach 90% of production capacity this week, and pre-protest output by the end of July.
Downstream, midstream and exports
As a result of the protests, the 115,000-BBL/d Esmeraldas refinery was operating at 70% as of July 4, although it was expected to reach full processing capacity in the next few days. Nevertheless, Petroecuador said it had high stocks of gasoline and diesel, due to the operation of the 20,000-BBL/d Shushufindi refinery.
The midstream sector also was affected by the unrest, leading to lower pumping levels across the 500-kilometer SOTE pipeline. The pipeline moves oil from Ecuador's northern oil fields to the country's ports on the Pacific coast. The transport of heavy-sour Oriente grade crude oil is expected to resume to normal levels.
The output disruptions led to delays in exports of Oriente crude oil, although shipments of heavy-sour Napo-grade crude oil remained stable, according to Petroecuador.
Political agreement
The unrest that brought Ecuador to a halt and led to losses estimated at $1 billion ended with an agreement between the government of President Guillermo Lasso and the indigenous organizations. As part of the negotiations, the administration will enact policies targeting the protesters' demands.
The agreement includes the reduction of gasoline prices, limitations on private investments in Petroecuador's operations and the reform of a mining decree introduced by Lasso. However, these changes will hamper Lasso's goal of doubling oil production to 1 million BBL/d and increasing mining operations under his tenure.
New negotiations between the government and indigenous groups will begin on July 7.
Industrial Info is tracking more than 120 active Petroecuador projects, worth more than US$895 million, and 43 operational plants. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production, Pipelines and Terminals project databases can click here for a list of detailed project reports and click here for a list of operational plant profiles.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
