QUITO: The economic impact of recent operational problems for Ecuador’s oil industry will be some $600 million, the Energy Ministry said on Thursday, adding it expects pumping on two pipelines affected by erosion to resume late this month and in early January.
Ecuador’s government on Monday declared force majeure over its oil exports and production contracts after the erosion taking place in the Amazon province of Napo forced the halt to the privately owned OCP pipeline and the state-owned SOTE pipeline.
Detours are being constructed for both pipelines to direct pumping away from the erosion, which began last year and is moving along the Piedra Fina river.
“With these actions the operations of the national oil sector will normalize, avoiding bigger economic impacts, which are now calculated at close to $600 million,” the ministry said in a statement. A seventh detour for the SOTE, which is controlled by state-oil company Petroecuador and transports up to 360,000 barrels per day (bpd), will allow operations to resume from Dec. 29, the statement added.
Meanwhile, a temporary detour for the OCP pipeline, which was moving an average of 180,000 bpd, is 40% complete and will be finished during the first week of January the ministry said.
“The construction work on the detours is taking place in 24-hour shifts to finish within the predicted timelines and under adverse weather conditions, given constant rain in the area.”
OCP said in its own statement the 4-kilometer-long bypass will be the pipeline’s ninth and that a new route had to be devised after rains stymied an original plan and forced the evacuation of staff.
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