Ecuador expects crude production to rise to 590,000 barrels-per-day (bpd) in 2020 after its planned withdrawal from the Organization of the Petroleum Exporting Countries (Opec), the energy minister said on Thursday. The Andean producer is pulling out of Opec to free itself from quota restrictions and hike output amid a cash squeeze.
Energy Minister Carlos Perez told Reuters the withdrawal from the 14-member bloc was necessary because Ecuador was producing 548,000 bpd - above its Opec quota of 528,000 bpd - and did not feel right being non-compliant. "They haven't reprimanded us, but we feel uncomfortable not respecting the agreements," he said.
"We hope to reach 560,000 bpd this year and next year we will be at an average 590,000 bpd daily ... We need to increase production because of the economic situation ... to have enough money for investments." Ecuador is running a wide fiscal deficit and has a hefty foreign debt. It reached a $4.2 billion deal with the International Monetary Fund in February and cut fuel subsidies this week in a package of measures that have brought the biggest street protests in years.
Quito has bet on new oil wells in its top-producing Ishpingo-Tambococha-Tiputini block, which recorded production of 82,658 bpd this week, to help increase output.
Perez said state oil company Petroamazonas' budget had been slashed by $407 million this year, but it was asking for $230 million to be returned. "If not, we are going to have trouble maintaining output. If not, we will have to start stopping drills," he said.
Ecuador's main refinery, the 110,000 bpd Esmeraldas facility, will have a planned, 20-day stoppage in the middle of this month to repair some catalytic units, the minister added.
Authorities were also planning to launch a tender for a private company to administer and operate Esmeraldas.
"We are going to ask the companies to improve the environmental aspect, the efficiency," he said.
"It will all be private investment," Perez added, saying the aim was for fuel to reach the European Union's (EU) so-called Euro 5 emissions standard.
The minister said Ecuador will in November auction rights to explore up to eight new oil blocks in a high-potential area known as Intracampos II, while next year it hopes to find foreign partners to produce heavy crude and natural gas offshore in the Gulf of Guayaquil.