Ecuador’s temporary oil moratorium will delay 2025 production goal- minister
Ecuador’s plans to double its oil production to 1 million barrels per day by 2025 will be delayed by a temporary moratorium on some areas agreed this month with indigenous groups, the country’s energy minister told Reuters.
The government and indigenous groups inked the moratorium on 15 blocks in the southeastern Amazonian provinces of Pastaza and Morona Santiago – where there has not previously been oil activity – until a law to regulate community consultation processes is drawn up.
The moratorium – which is expected to last at least 12 months – and a similar deal for mining in indigenous areas are the most important steps yet to implement agreements that ended weeks of anti-government protests earlier this year.
President Guillermo Lasso pledged when he took office in May 2021 to increase crude output to 1 million barrels per day (bpd) by 2025. However, Energy and Mining Minister Xavier Vera said late on Thursday that due to the moratorium, the government now expects production of only 756,000 bpd by 2025.
“The million barrels will be affected because within the planning were the southeastern blocks,” Vera said in an interview in his office in Quito. “As we’ve accepted the moratorium… (exploration of the southeastern blocks) will be moved a year.”
Ecuador will end this year with crude production of 540,000 bpd, rising from a current 490,000 bpd, he said.
Crude production – hit heavily by the June protests – has also been reduced by a temporary suspension of pipeline transport due to erosion and a natural decline in output.
The indigenous deal also suspends the awarding of mining contracts in areas close to indigenous territories or to communities but will apply only to new projects, Vera said.
“Projects that are underway – either in exploration or which are now in the exploitation phase – will continue,” he said.
Indigenous leaders said this week the stipulations of the deal are minimal compared to their demands regarding extractive activities.
The government expects exports from its two major copper and gold mines and from separate small-scale mining production to reach $3 billion this year and plans to award new concessions in December.
A recent deal with Chinese oil company Petrochina will raise immediate liquidity for Ecuador, Vera added.
Source: Reuters (Reporting by Alexandra Valencia; Writing by Julia Symmes Cobb; Editing by Mark Porter and Susan Fenton)