Petroecuador
halts oil exports after pipeline shut
By
Alexandra Valencia
Reuters
QUITO
Petroleumworld.com
02 21 06
Ecuador's
state oil firm Petroecuador on Monday declared force majeure and
suspended its crude exports after a violent protest in Napo province
forced it to shut down its key SOTE oil pipeline.
Petroecuador's
halt on its exports, averaging 144,000 barrels per day (bpd),
would go into effect early Tuesday following the closure of its
400,000 bpd Trans-Ecuadorean pipeline after protesters stormed
a pumping station to demand more state resources for the poor
amazonian province.
The demonstrations
were the latest to impact the petroleum industry in Ecuador, which
is the region's fifth largest oil producer with output from state-run
Petroecuador and private oil companies averaging around 530,000
barrels per day.
"We have
declared force majeure and that means exports will be suspended
from the first hour of Tuesday," a Petroecuador spokesman
said.
Petroecaudor
oil pipeline director Hector Villacreses told Reuters earlier
SOTE crude pumping was halted completely because demonstrators
invaded the El Salado station and caused serious damage that prevented
operations from continuing.
He did not
give details on how long the company would take to repair the
station to the east of Quito. Demonstrators had damaged an electric
generation and information equipment.
Petroecuador
uses the SOTE pipeline -- which carried around 360,000 barrels
per day at the time of the stoppage -- to transport its crude
from Amazon region fields to ports on the Pacific Ocean.
"This
contributes to a general sense of insecurity among buyers, which
over the long term contributes to higher prices, even though the
amount of oil that Ecuador produces is relatively small,"
said Bruce Everett, a former ExxonMobil executive who teaches
at the Fletcher School at Tufts University in Massachusetts.
"The
more we get instances of this kind of instability the more insecure
buyers and sellers feel," he said.
Petroecuador
often faces protests calling for more state resources from local
residents. Nine Petroecuador technicians were briefly kidnapped
from the station during the brief protest in El Salado but were
later released.
Napo residents
and regional authorities on Monday declared a strike against the
government of President Alfredo Palacio to demand resources to
construct roadways and an international airport in the area. They
threatened to storm more pumping stations and oil installations.
"This
is a radical strike. If the government does not assign the resources
we are demanding the strike will only worsen," said Raul
Hidrovo, one of protest leaders.
The shutdown
in Napo on Monday was the third during the Palacio administration,
including one in August 2005 that shutdown the oil sector of the
Andean nation.
The Amazonian
provinces where Petroecaudor and private oil companies operate
are among the poorest in the country.
Earlier this
month protests forced Petroecuador to suspend oil exports after
hundreds of demonstrators invaded another pumping station to demand
the government quit trade talks with the United States and expel
a U.S. oil company.
(Additional
reporting by Hugh Bronstein in Bogota)
Reuters 02 20 06
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