Correa: Oil cuts needed
Ecuador cuts oil budget to $3bn
Ecuador’s President Rafael Correa said today the country will earmark about $3 billion this year to run state oil company Petroecuador, a cut of $1.8 billion on last year.
Last year, Correa’s administration initially approved a $4.8 billion budget for Petroecuador to boost dwindling production.
"We are prioritising ... we gave them (Petroecuador) $3 billion for operations and investment, but they can invest as much as they can if they are able to get financing via bids or strategic alliances," Correa said
Lower state spending may further hurt the country's oil production, which fell 1% last year to 504,843 barrels per day, according to a Dow Jones report.
Correa has boosted state control over the oil sector, a move analysts claim has scared off billions of dollars in private investment since he took office in 2007.
Oil Minister Derlis Palacios said Petroecuador will have to invest only in ongoing and strategic projects such as an upgrade of it 100,000 bpd capacity Esmeraldas refinery.
In a previous radio interview, Palacios said he saw no benefit for Ecuador under current world oil prices if Opec decides to slash output again.
Palacios said Petroecuador aimed to keep production levels unchanged this year, but he did not specify if he meant output from all projects currently operated by the state.
Petroecuador's production arm, Petroproduccion, produced around 174,000 bpd in November.
Petroamazonas, a state-run complant that operates an oil bloc formerly owned by Occidental Petroleum , produced around 102,000 bpd during the same month.