Ecuador may reconsider leaving OPEC, but a decision may not be made by the oil producers’ organization’s meeting this week in Vienna, sources familiar with the deliberations told S&P Global Platts on Monday. “Discussions at a very high level going on,” a source said on condition of anonymity.
New energy minister Jose Agusto, who was named to the post on November 19, replacing Carlos Perez, has not yet decided whether to attend this week’s OPEC meeting in Vienna, sources said. An OPEC delegate said he was aware Ecuador was wavering on its OPEC withdrawal but was not expecting it to reverse course.
If it did rejoin, the South American producer would likely be welcomed back with open arms as OPEC and its allies try to maintain unity in their mission of preventing a supply glut through production cuts. The OPEC+ coalition will gather Thursday and Friday in the Austrian capital to discuss the future of their 1.2 million b/d production cut agreement, which expires at the end of March.
Ecuador surprised OPEC in October by announcing its withdrawal effective the end of this year, citing its need for higher revenues that had been crimped by the bloc’s oil cuts. Ecuador first joined OPEC in 1973 and then had a hiatus from 1992 to 2007. The country implemented new austerity measures to comply with the terms of a $4.2 billion loan from the International Monetary Fund and said it could no longer continue with its OPEC membership as it sought to “reduce public suspending and generate new income” in the name of “fiscal sustainability,” according to its energy ministry at the time.
But its habitual non-compliance with its crude production quota under the OPEC+ supply accord indicated the country’s lack of enthusiasm for continuing with the deal. Ecuador pumped 460,000 b/d in October, according to the latest S&P Global Platts OPEC production survey. That is below its quota of 510,000 b/d, but only because widespread protests against the austerity measures disrupted production and caused state oil company Petroecuador to declare force majeure on exports.