State-owned EP Petroecuador continues to recuperate lost oil production after the government of Ecuador’s President Guillermo Lasso and Indigenous leaders signed a deal that ends weeks of social unrest and paves the way for the normalization of operations across the country’s hydrocarbon value chain.

Since signing the deal on June 30, which includes fuel price reductions and other concessions, Petroecuador has recuperated around 91% of its production lost in June due to protests over rising food and fuel prices, it said July 4 in a press statement. The company anticipates a return to normal production levels by the end of July.

“We continue working 24 hours a day… to raise production levels,” Petroecuador Exploration and Production Manager Bladimir Cerón said in the statement, adding that the company continues to eye doubling oil production in the future. 

Social unrest sparked by rising prices and inflation peaked in early June and sparked unrest across the Andean country that eventually forced Lasso’s government to declare force majeure to avoid additional financial damage to arise from possible lawsuits. Ecuador’s oil sector rents account for around 7% of the country’s gross domestic product, according to The World Bank.

Petroecuador’s oil production reached 361,535 bbl/d on July 3, up 95% from a low of 184,933 bbl/d on June 26, the state-owned company said. Production is still short of the 396,163 bbl/d the company was producing on June 12 a day prior to the start of the unrest.

Hart Energy July 2022 - Petroecuador Recoups Oil Production after Protests End - Rig website image
Currently only 82 wells remain closed, of the almost 1,000 that were affected by acts of vandalism, which in some cases even stole generators, communication equipment, cables, variators, pumps and that were replaced with materials that we keep in our warehouses. In the case of the 82 wells, some will go into reconditioning, according to Ítalo Cedeño, general manager of EP Petroecuador. (Source: Petroecuador)

Petroecuador accounts for around 80% of Ecuador’s oil production with private companies accounting for the remaining barrels. Total combined production from Petroecuador and the private companies reached 461,637 bbl/d on July 3, according to a report posted on Ecuador’s Energy and Mines Ministry website.

Unrest Impacts

During the 18 days of unrest combined with a national strike, Petroecuador registered accumulated losses of 1,997,685 bbl of oil while 959 wells and 34 production towers were shuttered across fields located in the provinces of Sucumbíos and Orellana. In all, Petroecuador reported losses of around $513 million related to the unrest, it said on its website.

Petroecuador has initially identified destruction and damage to machinery, theft of equipment, materials and tools, among other damage caused by protesters that occupied its numerous installations.

The state entity continues to take measures to increase and normalize shipping operations along Ecuador’s Trans-Ecuadorian Oil Pipeline System (SOTE), which were also temporarily suspended due to the unrest, while taking other measures in an attempt to soon lift the force majeure order, the company said.

Comments