ORELLANA, Ecuador – Ecuador will request an exemption if its partners in the Organization of the Petroleum Exporting Countries (OPEC) decide to cut output further in a bid to boost the price of crude, the Andean nation’s minister of hydrocarbons said on Thursday.
“I go to OPEC in Vienna at the end of November and Ecuador’s argument will be to request the possibility of not complying with the (production) targets established by OPEC,” Carlos Perez told reporters who accompanied him on a visit to the Block 43 oilfields in the eastern province of Orellana.
Ecuador needs to boost petroleum production to address its budget deficit, the minister said.
Even so, he said that President Lenin Moreno’s government supports the overall OPEC strategy.
Earlier this year, OPEC asked member-states to reduce output in a bid to keep prices from falling any further. In the case of Ecuador, the cartel’s smallest producer, the guidelines called for a cut of 25,600 barrels per day.
Perez acknowledged on Thursday that while Quito initially reduced production by 80 percent of the specified amount, compliance has since slipped to 60 percent.
The production quotas are due to be reviewed next March, the minister said, pointing out that much larger producers than Ecuador have sought and received exemptions in the past.
“We have to increase production by around 50,000 additional barrels, to 580,000 barrels (per day) in 2018,” Perez said, adding that the expansion would generate an additional $2 billion for the treasury.
In response to a question, Perez said OPEC will not punish Ecuador for exceeding its quota and that the government is requesting the exemption because it “wishes to follow the correct path.”
“But nobody forces us to comply with this,” he said.