Ecuador Internacional

Ecuador Reveals Pain Inside OPEC: It's Pumping Oil at a Loss

Bloomberg Business - Javier Blass and Nathan Gill 26/08/2015

Ecuador has revealed the financial stress inside OPEC created by low oil prices, becoming the first member of the group to say it’s pumping at a loss.

President Rafael Correa said on Tuesday that the South American nation is receiving as little as $30 a barrel for its crude, while production costs average about $39. The warning comes after several other members of the Organization of Petroleum Exporting Countries, including Algeria and Libya, said the group should consider holding an emergency meeting to respond to the drop in oil prices.

“We are going through a very difficult year economically because the price of oil collapsed,” Correa said in a speech in the central highland province of Cotopaxi.

Brent crude, the international benchmark, has fallen to a six-year low of less than $45 a barrel on concerns that economic problems in China will slow demand growth just as the U.S., Russia, Saudi Arabia and Iraq add to a global supply glut. The average selling price of OPEC crude averaged $40.47 Tuesday, the group said in a statement.

Ecuador is OPEC’s second-smallest member by output, with daily production of 538,000 barrels last month, according to data compiled by Bloomberg. Oriente, the nation’s main blend of crude, sold for $36.67 on Wednesday compared with $43.27 for Brent crude, which is a higher-quality oil. The country suffers from “operating difficulties at existing, mature oil fields,” according to the U.S. Energy Information Administration.

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