Ecuador Says It'll Cap Output at Higher Level in Deal With OPECBy
A month after dealing a blow to OPEC, Ecuador says it will cap output at a more comfortable level than it had initially pledged.
The South American country will limit its production at its current 541,000 barrels a day to avoid undermining the group’s output-curbs deal, Ecuadorian Oil Minister Carlos Perez said Tuesday. While that breaches the 26,000-barrel-a-day cut to 522,000 that Ecuador had committed to, it’s less than the country’s potential at a time the government needs to boost revenues, he said.
“Even though there is greater potential, we have a commitment with OPEC to maintain this production until there are new guidelines,” Perez, a career private-sector oilman, said after touring the 110,000-barrel-a-day Esmeraldas refinery together with President Lenin Moreno.
Recently inaugurated Moreno has broken with his former mentor Rafael Correa, ending the country’s position as an OPEC hawk, canceling his support for Venezuela and stripping Vice President Jorge Glas, a close associate of Correa, of a role in the government.
Perez, who got a call from Saudi Energy Minister Khalid Al-Falih last month when he abandoned the OPEC deal because of the nation’s troubled fiscal and economic situation, signaled Ecuador wants to keep increasing production as soon as possible.
OPEC officials didn’t immediately respond to phone calls and emails after normal working hours.
After touring the Esmeraldas plant, Perez and Moreno said oil companies would be welcome to invest under production-sharing agreements scrapped by Correa in 2010.
Unlike Saudi Arabia or other major producers, Ecuador can’t easily increase output. Current production is close to capacity, but below a record of around 560,000 barrels a day last reached in 2014.