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

[C130]

Ecuador Reveals Pain Inside OPEC: It's Pumping Oil at a Loss - The Money Street

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.

Other OPEC members also receive prices below Brent because their crude is heavier or contains more sulfur. Saudi Arabia sells several grades — includingArab Medium and Arab Heavy– at prices of $37 to $39 a barrel to buyers in the U.S. Iraq gets as little as $34 for its new crude blend Basrah Heavy, according to data compiled by Bloomberg.

Algeria’s Energy Minister Salah Khebri wrote to fellow OPEC members recommending the group consider measures for reviving oil prices including an emerging meeting, according to two people familiar with the letter. Venezuela is evaluating whether to call for a special meeting, President Nicolas Maduro said on state television Aug. 12.

Saudi Arabia, the world’s largest oil exporter and de facto leader of OPEC, so far hasn’t responded to calls for an emergency meeting. The group’s next regular gathering is scheduled for Dec. 4 in Vienna.

 

[C130]

now these fools wanna drill for oil in a National park

Ecuador signs permits for oil drilling in Amazon's Yasuni national park | Environment | The Guardian


just one hectare of this National forest has more biodiversity than all of Canada and U.S combined

and they tried to black mail the world community to not to drill there.

$3.6 billion dollars

 

[Hamartia Antidote]

ah yes President Rafael Correa Correa Defaults on Ecuador Bonds, Seeks Restructuring (Update4) - Bloomberg

 

[MastanKhan]

Hi,

Last year in sept----I paid 475 dollars for a 100 gallons of propane gas---. Today---I just got a call from my distributor begging me to buy a 100 gals for 150 dollars.

Things are getting bad for many.

 

[C130]

Hi,

Last year in sept----I paid 475 dollars for a 100 gallons of propane gas---. Today---I just got a call from my distributor begging me to buy a 100 gals for 150 dollars.

Things are getting bad for many.

gas hasn't crashed nearly as hard as oil.

U.S. Propane Residential Price (Dollars per Gallon)

 

[MastanKhan]

gas hasn't crashed nearly as hard as oil.

U.S. Propane Residential Price (Dollars per Gallon)

Hi,

So you saying I got a deal at $1.35 a gallon----not bad then----.

 

[C130]

Hi,

So you saying I got a deal at $1.35 a gallon----not bad then----.

depends where you live??

if you live the North East it's going to cost more than let's say Texas.

 

[Jai Bharat]

now these fools wanna drill for oil in a National park

Ecuador signs permits for oil drilling in Amazon's Yasuni national park | Environment | The Guardian


just one hectare of this National forest has more biodiversity than all of Canada and U.S combined

and they tried to black mail the world community to not to drill there.

$3.6 billion dollars

If their heavy oil is making a loss now at $40 a barrel I have no idea why any sensible company would want to invest in more oil development. So I think the forest is safe for now.

Back when oil price was high they should have used their leverage to attract foreign investment to bring costs down and expand production like everyone else in OPEC, but instead they used the time to jeer 'evil Amerika' and wasted their money on corruption and failed socialism.

 

[MastanKhan]

depends where you live??

if you live the North East it's going to cost more than let's say Texas.

Sunny southern california

 

[Providence]

The problem is, OPEC doesn't have the same drilling costs. Some oil fields have substantially high drilling costs while some less. It really depends upon topography ( which is almost always same across a country ).

So Ecuador's calls might fall on deaf ears if most major oil economies have a break even point below $39 and OPEC doesn't have that power in their bazooka anymore to set worldwide agenda. This ain't 80s.

It's all hands on deck for all oil economies unfortunately nobody have the elbow space for giving out doles !!

 

[C130]

Ecuador condemned at the new Tribunal for the Rights of Nature in Paris


Last weekend, while the official COP21 negotiations were going on north of Paris at a site called Le Bourget, leaders of indigenous nations in North and South America were in Paris calling for justice for what they say are ongoing violations of the rights of the earth itself.

The “rights of nature” were recognized in the Universal Declaration on the Rights of Mother Earth in Cochabamba, Bolivia, in 2010, designed as an alternative to the COP meetings. The declaration, which gave rise to the International Tribunal for the Rights of Nature, created “a manifesto for earth justice,” in the words of the president of the current tribunal, Cormac Cullinan, author of Wild Law. The book, published in 2003, lays out a case for granting legal rights to communities and ecosystems.

The first such tribunal was held last year in Quito, Ecuador, and its second session was almost a year later in Lima, Peru.

Among the cases heard by this tribunal, several dealt with oil exploitation in Ecuador — a country that, ironically, was the first to include the rights of nature into its 2008 constitution. One of these cases focused on Yasuní National Park.

Yasuní is a UNESCO World Heritage Preserve and a biodiversity hotspot. Nowhere else are there more documented species of mammals, birds, amphibians and vascular plants. As one presenter noted, in one tree in Yasuní, one can find 94 species of ants; one hectare holds more tree species than the US and Canada together.

But Yasuní also sits above the largest oil reserve in Ecuador – 846 million barrels – presenting a threat to the people and animals living in it.

Yasuní as a ‘common good for humankind’

Under the Yasuni-ITT Initiative in 2007, Ecuador committed to keep from exploiting the reserve, to avoid carbon dioxide emissions, and to protect biodiversity and the rights of indigenous people. The park is home to the Waoraní tribe, as well as two closely related uncontacted groups, the Tagaeri and the Taromenane.

The international community committed to a fund that would be dispensed under U.N. supervision as long as the government kept its promise. However, this initiative was dropped by President Rafael Correa in 2013 when not enough funds materialized. He ordered drilling in Yasuní soon after.

Speaking at the tribunal, Carlos Larrea, a professor at Quito’s Universidad Andina Simón Bolivar, noted that significant damage would be caused by the extraction of oil within Yasuní. “If we regard the Amazon rainforest as a common good for humankind as a whole, protecting it is a priority,” said Larrea. “The risk of ecocide in Yasuní is very high – the government already built a road inside the park, and roads have a very dangerous effect on biodiversity.” He added that there is a high risk of oil spills: between 2000 and 2011 spills in the area reached a frequency of almost one per week.

Keeping it in the ground

Citing the precautionary principle, Larrea asked the tribunal to consider the idea of keeping the oil in the ground as the only option for effective protection.

After Correa dropped the Yasuni-ITT initiative, a group of Ecuadorian activists called Yasunidos collected signatures to try to call a referendum in Ecuador. Carolina Vallejo, a representative of the group, testified that Correa’s government spied on the phones and emails of rights defenders.

“In the end the harassment wasn’t enough, so they had to throw out 60 percent of the signatures gathered – for reasons of form, not substance, like the paper was too small or the weight was inadequate,” said Vallejo. This breach of rights, not only Yasunidos’ but of Ecuadorians as a whole, was also denounced at the Inter-American Commission on Human Rights.

Despite the setbacks, the group says it has not been deterred. Vallejo presented the group’s proposal for keeping fossil fuels in the ground: an international fund to help societies trying to keep their resources from extraction, which would be regulated not by states but by global civil society.

“We are convinced that climate justice starts from the underground,” said Vallejo to massive applause, concluding that it must be built collectively between organizations from the global north and south.


José Gualinga, a Sarayaku leader, testifies at the Tribunal about his people’s successful efforts to halt seismic testing for oil in their territory. Photo by Karen Hoffmann.
The sentence

Alberto Acosta, former president of Ecuador’s Constitutional Assembly and architect of the country’s 2008 Constitution, presented the so-called verdict, saying: “I do this with emotion, thinking of my grandchildren.” He cited the Law of Mother Earth and the Ecuadorian constitution in concluding that there are sufficient elements to proclaim a sentence to be against the law of nature. Acosta noted that prior consultation with indigenous or forest-dwelling peoples is directly recognized in his country’s constitution. Furthermore, he noted, Article 414 says that Ecuadorian government must reduce emissions and stop deforestation, while Article 318 prohibits the privatization of water.

Openly denouncing Correa, he said, “When the government opened up oil exploration in 2003, it caused great damage to the constitution of Ecuador and the Law of Mother Earth. The government is trying to erase indigenous people from the map to justify the exploitation of oil.”

In Acosta’s words, Ecuador’s oil exploitation constitutes “ecocide without end.” Last year, Ecuador announced it had approved permits for oil drilling to a subsidiary of the national oil company, Petroamazonas. Drilling will begin in the Yasuní ITT blocks by next year.

Meanwhile, President Correa has also proposed the creation of a different environmental tribunal, widely derided by Ecuadorian environmental activists like Yasunidos, given his environmental record.

Coming from a citizen’s tribunal, the sentence of course doesn’t have the power of government. However, Cullinan noted, its judgments are “intended to show the way forward. They are about holding people and organizations accountable – but they are also intended to point a path to the future.

 

[VCheng]

depends where you live??

if you live the North East it's going to cost more than let's say Texas.

About two bucks fiddy for premium around these parts.

 

[Hamartia Antidote]

About two bucks fiddy for premium around these parts.

Up here in New England at a Shell station
$2.59 premium / $0.68 litre
$2.33 mid / $0.62 litre
$2.03 regular / $0.53 litre