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Ecuador’s Petroecuador declares force majeure over Napo crude exports, sources say

Monday, 24 June 2024 | 20:00

Ecuador’s state oil company, Petroecuador, has declared force majeure over deliveries of Napo heavy crude for exports following the shutdown of a key pipeline and oil wells due to heavy rains hitting the country, sources said.

Intense rains over the weekend forced the shutdown of three hydroelectric plants, the suspension of a key heavy crude pipeline operated by private companies and a temporary closure of heavy oil-producing wells.

A nationwide electricity outage that struck residential users, hospitals and the capital’s subway system followed the rains this week. The government attributed the electricity outage to a faulty transmission line.

Ecuador’s privately operated OCP pipeline decided to shut valves and stop pumping heavy crude on Monday as a preventative measure as heavy rains accelerated erosion surrounding the infrastructure, OCP said.

As part of the force majeure declaration, Petroecuador informed customers that two tenders that were planned to be awarded this week to allocate crude cargoes for July delivery were postponed to late June, the sources added.

Petroecuador has not specified how long the force majeure, which justifies the cancellation of scheduled cargoes in special circumstances, will last. It told customers that new loading windows would be assigned as soon as the pipeline restarts, rescheduling pending deliveries.

The state company did not immediately reply to a request for comment.

Petroecuador’s crude production fell to some 338,500 barrels per day (bpd) on Wednesday from 390,121 bpd on Sunday, following the well closures, according to official figures.
Source: Reuters (Reporting by Alexandra Valencia in Quito and Marianna Parraga in Houston, Editing by Julia Symmes Cobb and Matthew Lewis)

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