Petroecuador has declared force majeure on its SOTE pipeline after a landslide ruptured it, causing an oil spill. This may impede crude oil exports, particularly to Shell Plc, while local authorities combat contamination in the Esmeraldas River. The mayor noted the damage as “unprecedented,” prompting water rationing measures for residents.
Ecuador’s state-owned oil company, Petroecuador, has declared force majeure on its Trans-Ecuadorian Pipeline System (SOTE) due to a pipeline rupture caused by a landslide resulting in an oil spill. This declaration, made on Tuesday, indicates that Petroecuador may struggle to meet its contractual commitments for crude oil exports while they work to contain the spill.
Internal documents, as reported by Bloomberg, suggest that the disruption will significantly impact exports to Shell Plc, which contracted for at least 1.8 million barrels of the heavy sour Oriente crude this month. Shell, a London-based company, has yet to respond to inquiries regarding this issue.
The SOTE is Ecuador’s main pipeline, boasting a capacity of 360,000 barrels per day, and stretches 500 kilometers (310 miles) from the Amazon to the Pacific coast. On Friday, Petroecuador confirmed it is addressing the pipeline emergency but did not disclose the oil spill volume.
The spill has notably affected the Esmeraldas River in Esmeraldas province, with residents of the town Cube reporting serious water contamination. Although they attempted to construct dikes to contain the oil, these efforts were largely ineffective. In response, the Emergency Operations Committee declared an environmental emergency due to deteriorating water quality.
Mayor Vilko Villacis of Esmeraldas, a city with over 200,000 residents, characterized the environmental damage as “unprecedented.” His office has suspended the diversion of river water to the city’s water supply and has urged residents to conserve water.
Ecuador’s daily crude oil production was 475,000 barrels last year, with 72 percent of that amount earmarked for exports.
In summary, the declaration of force majeure by Petroecuador highlights the significant impact of the recent pipeline rupture on oil exports and the environment in Ecuador. As efforts continue to contain the spill and assess its damage, the local community faces immediate water quality concerns and potential shortages. The incident underscores the vulnerabilities inherent in the country’s oil transportation infrastructure.
Original Source: www.pipeline-journal.net
