Ecuador, Which Produces About 490,000 Barrels of Crude Oil Per Day, Declares ‘Force Majeure’ and Suspends Pumping in Pipelines Due to Risk of Breakage in River of Amazon Region

Petroamazonas Has Sufficient Stocks of Gasoline, Diesel, Aviation Fuel, Fuel Oil for Electricity Generation, and LPG for Domestic Use at All Its Terminals.

Ecuador, which produces about 490,000 barrels of crude oil per day, declared for the third time a “force majeure” in its oil sector due to the erosion of the Coca River, located in the Amazon region, which currently compromises the infrastructure dedicated to oil transportation in the country. The danger is that the pipelines may break again.

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The decision is made after the advancement of erosion led to the interruption of crude oil transportation through the Trans-Ecuadorian Pipeline System (SOTE) and the Heavy Crude Pipeline (OCP), as well as derivatives in the Shushufindi-Quito pipeline,” a statement from the Ministry of Energy and Non-Renewable Resources released on Monday said.

“Force majeure” is a clause established in oil contracts that allows certain commitments made by the country to be suspended “when there is an irresistible, unpredictable, or unavoidable circumstance that causes obstruction or delay, total or partial, in fulfilling obligations between the parties,” as is the case with the natural phenomenon of erosion that puts oil infrastructure at risk.

Ecuador Develops Action and Contingency Plans to Minimize the Impact of the Situation Across the Oil Chain

Following this declaration, authorities reported that action and contingency plans are being implemented to minimize the impact of the situation across the hydrocarbons chain: exploration, production, refining and industrialization, transportation and storage, and both domestic and international marketing of oil and its derivatives.

Among these actions is the construction of variants that allow for the resumption of crude oil pumping, and once Petroamazonas and the OCP have the technical conditions to restart operations, they must notify the ministry and the Agency for Regulation and Control of Energy and Non-Renewable Natural Resources (Arcernnr).

The statement also indicates that efforts will be coordinated to maintain the supply of fuel at the national level and that Petroamazonas has sufficient stocks of gasoline, diesel, aviation fuel, fuel oil for electricity generation, and LPG for domestic use at all its terminals.

According to official information, the OCP and Petroamazonas allow for the transportation of crude oil from the Amazon province of Sucumbíos (northeast) to Esmeraldas (northwest). Between January and October 2021, the SOTE transported 319,442 barrels of crude oil daily, while the OCP transported 163,221 barrels of oil per day.