Petroecuador declares “force majeure” in oil fields due to conflict with communities

First modification: 03/22/2023 – 03:55

In the Ecuadorian Amazon, the Kichwa indigenous community of Edén stands up to the Ecuadorian state oil company, Petroecuador, for an alleged breach of the agreements by the company.

Petroecuador decreed “force majeure” because the actions of the El Edén Kichwa community have interrupted operations since February 21.

“The duration of this declaration of force majeure will be subject to the definition or agreements reached by government entities with the communities,” the company said in a statement.

According to the company, the cessation of operations in the El Edén field generates daily losses of 4,900 barrels of crude. This, added to the interruptions caused by the earthquake on Saturday and other failures, the company reports a drop of 24,000 barrels in daily production.

What does the declaration of force majeure address?

It is a figure contemplated in Ecuador’s oil contracts to shield companies from possible lawsuits for breaches of crude oil sale and export commitments, when events beyond the control of the companies arise.

According to the Government, through Petroecuador, “it makes its best efforts to keep its facilities operational and safeguard the integrity of the workers, who are working with full commitment despite the high risk to which they are exposed.”

Blocks 16, 61, 43-ITT and 67, recently closed, together normally produce about 142,000 barrels of oil per day, according to data from the Agency for the Regulation and Control of Non-Renewable Energy and Natural Resources, while block 12 produces about 29,000 barrels of crude oil per day.

This represents 35.6% of national production, which is currently around 480,000 barrels per day. Oil is one of the main raw materials that Ecuador exports, as well as one of the most important sources of income for the State.

With EFE and Reuters