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Ecuador could be forced to suspend all oil production within 48 hours as anti-government protests in the country intensify, the Ecuadorian energy ministry warned.
The production suspension was to be "due to the acts of vandalism, takeover of wells and closing of roads, supplies and diesel necessary to maintain operations has not been possible," the ministry said, as cited by Bloomberg.
Protests erupted in the Andean country earlier this month against the economic policies being implemented by the government of President Guillermo Lasso, chiefly among the indigenous population.
They quickly spread and escalated to roadblocks and oil well vandalism, as the protesters demanded cheaper fuel and food price controls, among other things. This Sunday, Lasso announced that he would institute fuel price controls in an effort to appease the protesters.
"Everyone considers that gas prices have become the cornerstone of maintaining the conflict and though we as a government are very clear that this factor isn't the origin of Ecuadoreans' problems, we must think of the common good and citizens' peace," he said.
Among the other concessions made to protesters were debt forgiveness and subsidies for fertilizers, all agreed this last weekend. However, the protests continue and earlier caused Petroecuador, the state oil company, to announce force majeure across its operations.
Ecuador has proven reserves of some 8.273 billion barrels of crude oil but is producing only about 400,000 bpd. Petroecuador, however, has the ambition to double this output level over the next five years and is looking for private sector investments of up to $12 billion to do it. Ecuador is a former member of OPEC.
However, if the government satisfies all of the protesters' demands, this increased output may never come into being: one of the demands is a moratorium on all new oil and mining projects in the Andean country.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com