Oil and Mines Minister Derlis Palacios announced that Ecuador will reduce its oil mining and production and increase investment in the exploration of oil and gas reserves
Ecuador's Oil and Mines Minister Derlis Palacios announced that Ecuador will reduce its oil mining and production and increase investment in the exploration of oil and gas reserves.
Palacios continued by saying the country's oil export has not seen a sharp decline due to weak market demand, and the reduction of 7,000 barrels a day will not be a big problem for its oil industry.
OPEC agreed last Friday in Vienna to cut oil output by 1.5 million barrels a day in an attempt to curb the downturn of oil prices.
The decision will be effective as of Nov. 1, 2008. By the time, Ecuador's oil production quota will be reduced from 520,000 to 493,000 barrels per day. The country now produces about 500,000 barrels of oil per day.
Palacios said that OPEC's decision was both "necessary and timely". He said the Ecuadorian government would begin to focus on the exploration of oil and gas reserves and would increase investment in this sector.
Palacios added that Ecuador would also postpone its plan to increase oil production in 2009 and to exploit a huge oil field named ITT located in the Amazon rain forest.
Ecuador, an OPEC member, is the fifth largest oil producer in South America. The country's oil reserves are estimated at about 2.36 billion barrels, and 45 percent of the government's financial budget comes from oil revenues.
Author: Jo Amey