Force Majeure Declared on Ecuador Oil Exports

Ecuador's state-owned oil company, Petroecuador, has declared a force majeure on crude oil exports due to a landslide that ruptured the country's only pipeline earlier in the week. Petroecuador will most likely have to delay shipments in coming days but no cargoes have been affected so far.

Ecuador's only crude oil pipeline stopped operations early on Tuesday after a landslide, caused by heavy rains that mixed with ash spewed from El Reventador volcano when it erupted last November. The rupture occurred approximately 63 miles east of Quito.

Petroecuador expects repairs to take between five and eight days. The state oil company was forced to start scaling back its own oil output on Thursday by 20 percent since storage tanks located at the head of the pipeline, known as SOTE, were reaching full capacity.

Ecuador relies on the pipeline to transport about 400,000 barrels of crude per day -- including state and private output -- from Amazon oil fields to a Pacific coast port for shipping. The state oil company has enough crude in stock at coastal Balao port for about another week and that any shipment delays will be likely decided once the pipeline resumes operations.