Between Nigeria, Iraq, Venezuela and now Ecuador, we will be lucky if the price of oil doesn't go throught the roof.
Ecuador Shuts Down Production
QUITO, Ecuador, Feb 20 (Reuters) - Ecuador's state oil firm Petroecuador on Monday declared force majeure and suspended its crude exports after a violent protest in Napo province forced it to shut down its key SOTE oil pipeline.
Petroecuador's halt on its exports, averaging 144,000 barrels per day (bpd), would go into effect early Tuesday following the closure of its 400,000 bpd Trans-Ecuadorean pipeline after protesters stormed a pumping station to demand more state resources for the poor amazonian province.
The demonstrations were the latest to impact the petroleum industry in Ecuador, which is the region's fifth largest oil producer with output from state-run Petroecuador and private oil companies averaging around 530,000 barrels per day.
"We have declared force majeure and that means exports will be suspended from the first hour of Tuesday," a Petroecuador spokesman said.
Petroecaudor oil pipeline director Hector Villacreses told Reuters earlier SOTE crude pumping was halted completely because demonstrators invaded the El Salado station and caused serious damage that prevented operations from continuing.
He did not give details on how long the company would take to repair the station to the east of Quito. Demonstrators had damaged an electric generation and information equipment.
Petroecuador uses the SOTE pipeline -- which carried around 360,000 barrels per day at the time of the stoppage -- to transport its crude from Amazon region fields to ports on the Pacific Ocean.
"This contributes to a general sense of insecurity among buyers, which over the long term contributes to higher prices, even though the amount of oil that Ecuador produces is relatively small," said Bruce Everett, a former ExxonMobil executive who teaches at the Fletcher School at Tufts University in Massachusetts.
"The more we get instances of this kind of instability the more insecure buyers and sellers feel," he said. |
