Page 6 - LatAmOil Week 39 2019

LatAmOil ECUADOR LatAmOil
Ecuador to drop out of OPEC as of January 1
ECUADOR has made the decision to withdraw from OPEC at the start of next year. The South American country’s Ministry of Energy and Non-Renewable Natural Resources announced the move this week, saying in a statement dated October 1 that it would no longer be a member of the group as of January 1, 2020.
The statement went on to say that Ecuador had decided against retaining its membership in OPEC because of financial problems. Specif- ically, it said Quito was taking this measure in order to ensure the country’s fiscal viability.
“The decision is based on the issues and internal challenges that the country must take on related to fiscal sustainability,” it said. “This measure is in line with the national govern- ment’s plan to reduce public spending and gen- erate new income.”
The statement also expressed general support for OPEC’s policy of trying to keep world oil markets in balance. Ecuador “has always been a constructive member of the Organisation and will maintain the ties formed with OPEC coun- tries,” the ministry said. It added: “The national government will continue to support all efforts that aim to stabilise the world oil market and the actions implemented by agencies and related countries to ensure equitable access to energy. We wish OPEC success in the continuation of the important work that has been carried out since 1960 for the benefit of producing countries.”
Ecuador first joined OPEC in 1973, but it withdrew from the group between 1992 and 2007 before rejoining. Its move to quit again appears to have taken OPEC by surprise, even
though there have been rumours to the effect that Quito was reconsidering its membership.
The South American country is currently producing about 530,000-545,000 barrels per day (bpd) of oil. This is well in excess of its OPEC production quota, which is set at 508,000 bpd under the current agreement between the cartel and other oil-producers such as Russia. (The agreement, known as the OPEC-plus deal, took effect at the beginning of 2019 and is due to remain in place until March 2020.)
Quito has never been in compliance with the OPEC-plus deal. It stopped abiding by OPEC’s production quotas in 2017 and has extracted more oil than prescribed every month this year sofar.
Ecuador is not the only country leav- ing OPEC in the near term. Qatar has also announced plans to quit the group.
As of press time, OPEC had not commented on Ecuador’s announcement. ™
The sun sets on Ecuador’s OPEC membership. (Photo: EnergyLandscapes.net)
BRAZIL
Upcoming Brazilian auctions draw interest from 14 IOCs
BRAZIL’S government has revealed that more than a dozen international oil companies (IOCs) have registered to participate in an upcoming licensing round covering four sizeable con- firmed offshore fields.
According to Decio Oddone, the direc- tor-general of Brazil’s National Agency of Petro- leum, Natural Gas and Biofuels (ANP), no less than 14 companies have signed up for the bid- ding contests, which will be held in November.
He told Bloomberg in an interview that the list included Royal Dutch Shell (UK-Nether- lands), ExxonMobil (US) and Chevron (US), as well as Total (France), Petronas (Malaysia),
Petrogal (Portugal), Equinor (Norway), China National Petroleum Corp. (CNPC), China National Offshore Oil Corp. (CNOOC), BP (UK), along with the national oil company (NOC) Petrobras.
Oddone further stated that Wintershall DEA (Germany) QPI (Qatar) and Colombia’s NOC Ecopetrol were also slated to take part in the auctions. He stressed, though, that these three companies were interested in signing on as non-operating partners in Brazilian offshore assets.
In any event, he noted, all of the participants
are large companies. 
P6
w w w . N E W S B A S E . c o m Week 39 03•October•2019