The mudslide that ruptured Ecuador’s main crude oil pipeline, the Sistema Oleoducto Trans Ecuatoriano (Sote), prompted Ecuador to declare force majeure Tuesday, and will cause transportation delays for the consortium of seven oil companies, two of them from the US, that share transportation and production rights with state-owned Petroecuador.
Transport of Oriente crude through the Sote will remain interrupted for approximately three or four days, when repairs of the main duct, located 50 miles east of capital city Quito, are expected to conclude, said Sergio Naranjo, an official at Petroecuador.
With capacity of 390,000 barrels per day, the Sote transports state and private crude production from the western Amazon region to the northeastern port of Esmeraldas. It is operated by Petroecuador and by a consortium that comprises US firms Occidental Petroleum and Kerr-McGee, Canadian Alberta Energy, Spanish-Argentine Repsol-YPF, Argentine Techint, and Italian ENI.
A secondary duct, Shushufindi, which transports fuel to Quito and runs parallel to the Sote at the point of the rupture, was also damaged.
In the past eight months, the flow of oil through the Sote has been affected by bombing attacks that brought transportation to a halt and caused several deaths and oil spills (OD Dec.15,p5). Oil is Ecuador’s largest export product, comprising 40% of total exports, which are channeled through the 313-mile Sote pipeline. This latest disruption in Oriente oil flow is not expected to have a major impact on US markets. . Last year, Ecuador exported to the US 126,000 b/d of crude, almost half of its total oil production and 1.4% of total US imports.
Government officials said that production losses due to the accident will total $20 million per day, and that affected private companies will be somehow reimbursed for the losses.
