Ecuador’s Oriente crude exports suspended, Napo flowing amid force majeure

By Alexandra Valencia and Marianna Parraga

QUITO/HOUSTON (Reuters) -Exports of Ecuador’s flagship Oriente crude remain suspended under a force majeure declaration as the spread of anti-government protests hurts oil output, state-run Petroecuador said on Wednesday.

At least eight people have died and road blockades have led to food and medicine shortages. The crisis has halved oil output, the country’s main source of revenue, to some 234,500 barrels per day while forcing reductions in fuel prices, though protest leaders have called the price cuts insufficient.

On Wednesday, the government of President Guillermo Lasso imposed a curfew and restricted transit in four provinces to restore public order, control violence, secure basic supplies and protect state property, while marking oilfields and facilities as secured zones.

The energy minister said on Sunday that output could be completely halted in a matter of days over acts of vandalism.

Petroecuador has not yet rescheduled the suspended Oriente cargoes, it said in a release. The firm issued a wide force majeure declaration over oil exploration, production, transport and exports on June 18, and enforced the cargo suspension on June 28.

“Once the force majeure is overcome, the company will timely notify companies about operations to coordinate the (cargo) rescheduling,” it said.

Exports of Napo heavy crude have continued flowing, according to trading and company sources, as the privately held OCP pipeline, which transports that grade from oilfields, is working with “relative normality.” But the state-owned SOTE pipeline remains halted since Monday due to low flows.

Customers including BP and Marathon Petroleum, which had resorted to Ecuadorian oil to try and replace cargoes of Russian crude lost due to sanctions, are now in talks with other Latin American and Middle Eastern producers, including Brazil’s state-run Petrobras, to buy oil cargoes for refining, the trading sources said.

U.S. refiners have increased purchases of Ecuadorian crude since Washington imposed a phased wind-down of Russian oil imports.

Peru’s state-run Petroperu also had won a tender to receive Ecuadorian crude in coming weeks for its Talara refinery, which is set to restart this year after an expansion project. But cargoes were ultimately resold to BP, which is waiting for a rescheduling to get the oil delivered.

BP, Petrobras and Petroperu did not reply to requests for comment. Marathon declined to comment.

Lasso on Tuesday survived an attempt by opposition lawmakers to oust him after he insisted his government would not negotiate further with an indigenous leader to end more than two weeks of paralyzing protests.

(Reporting by Alexandra Valencia in Quito and Marianna Parraga in Houston; additional reporting by Marco Aquino in Lima; Editing by Gary McWilliams and Leslie Adler)