Ecuador's state-owned oil company Petroecuador declared force majeure across exploration, production, and transportation operations amid escalating protests against the government.
This means that exports of oil from the Andean country will be halted, as protesters entered oil fields, Reuters reported, citing a statement by Petroecuador.
The protests by indigenous peoples in Ecuador against the economic policies of the government of Guillermo Lasso, which have recently included fuel price hikes, prompted the president to declare a state of emergency across three provinces. This, however, did not stop the protests, as people demanded cheaper fuel and food price controls, Al Jazeera reported.
The state of emergency was motivated by the high degree of violence erupting among protesters in the three provinces where it was declared, with President Lasso saying, "I called for dialogue and the answer was more violence, there is no intention to find solutions."
In addition to the economic demands of the protesters, they also want a suspension of new mining and oil projects, Reuters reported. As a result of these protests, Petroecuador said it had lost some 6,975 barrels of crude and has had to suspend some drilling operations.
Ecuador has proven reserves of some 8.273 billion barrels of crude oil but is producing only about 400,000 bpd. Petroecuador, however, has the ambition to double this over the next five years and is looking for private sector investments of up to $12 billion to do it.
"In order to complete these projects within the planned deadlines, private capital and adequate regulations to provide legal certainty to those keen to invest in the hydrocarbon sector will be needed," the state company said earlier this year as quoted by Reuters.
"There are approximately 45 billion barrels of oil identified and only 14% is being produced, a figure that shows resources are not used properly," said the chief executive of the company separately.
By Michael Kern for Oilprice.com
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