Ecuador expects the suspension of oil exports to last about two weeks. It is scheduled to shut down a portion of its oil wells.
The Minister of Energy, Fernando Santos, accepted the request of the state oil company Petroecuador and will declare force majeure in the oil sector, with which the country will suspend oil exports.
This decision will allow the country’s largest oil company to avoid sanctions with the foreign contractors to which it sells oil.
The declaration will also allow prioritizing the delivery of oil stored in Balao, province of Esmeradas, to refineries in Ecuador. Santos also announced that Petroecuador will import more fuel to guarantee internal supply.
“For now we have significant fuel reserves to guarantee internal supply,” stresses the Minister of Energy.
Petroecuador still has a stock of 1.8 million barrels of oil in storage tanks at Balao.
And it is that Ecuador suspended the operation of three important oil structures on February 22, 2023 due to “sudden and a sinkhole” erosion in the Marker River, in the Amazonian canton of El Chaco.
The oil structures at risk are:
- Trans-Ecuadorian Pipeline System (SOTE), owned by the state oil company Petroecuador.
- Shushufindi-Quito pipeline, also run by Petroecuador.
- Heavy Crude Oil Pipeline (OCP), operated by the private company of the same name
By itself, SOTE transports 360,000 barrels of oil per day, in a route that includes 497 kilometers from the Amazonian city of Lago Agrio to the maritime terminal of Esmeraldas.
The OCP follows a route similar to that of the SOTE but transports a smaller volume of 151,000 barrels per day.
Risk of breakage
As a result of regressive erosion, which crumbles the banks of the Marker River, part of the SOTE pipeline and the polyduct bent until it almost broke.
The one that suffered the most damage was the Shushufindi-Quito pipeline, which transports 5,151 barrels of base gasoline, diesel, and gas for domestic use per day.
According to Minister Fernando Santos, the fuel from the pipeline and the oil from the OCP had already been drained, but the oil from SOTE had not.
A team of Petroecuador technicians will try, with a crane, to straighten and give more support to the SOTE to finish the process of draining or emptying the oil, in order to avoid a spill, he added.
Despite the sensitivity of the situation, Santos is optimistic that an oil spill can be avoided.
The Minister of Energy said that Petroecuador machinery is moving to the risk zone to begin the layout of a new variant , which will take between seven and 10 days.
Since the two pipelines are paralyzed, it is expected that the storage tanks in the Amazonian city of Lago Agrio will soon be filled. Once that happens, Petroecuador will start shutting down the oil wells, Santos says.
“We believe that in two weeks the pumping can be solved, and the temporary closure of wells can be reactivated, which we hope will be very few,” adds the Minister of Energy.
For every day that oil operations are suspended, Ecuador stops exporting 300,000 barrels.
Three years of latent risk
It is the third time that Ecuador has declared force majeure for the oil sector since February 2020, when the erosive process began in the Coca River.
The first declaration occurred on April 8, 2020, when a sinkhole on the left bank of the Coca River caused the rupture of the OCP, the SOTE and the Shushufindi-Quito Polyduct.
The second occasion was between December 8 and 30, 2021, when the operation of SOTE and OCP were also suspended.
On both occasions, Ecuador was unable to export oil.
Petroecuador had already talked about the need to build a definitive variant of SOTE and the Shushufindi-Quito pipeline, at a cost of USD 200 million. This implies a new layout of the two pipelines in El Chaco, but it remains in plans.