QUITO- Ecuador, one of the smallest members of the Organization of the Petroleum Exporting Countries, said on Tuesday it will leave the 14-nation bloc from Jan. 1 due to fiscal problems.
The Andean nation is attempting to increase crude production to raise more income and has on multiple occasions broken its output quota fixed by OPEC.
“The decision is based on the issues and internal challenges that the country must take on related to fiscal sustainability,” the energy ministry said in a statement, without providing further details.
“This measure is in line with the national government’s plan to reduce public spending and generate new income,” it added.
Ecuador produces about 545,000 barrels per day (bpd) of crude, but is struggling with tight liquidity because of a wide fiscal deficit and hefty foreign debt.
It reached a $4.2 billion deal with the International Monetary Fund in February which allowed it to receive an immediate disbursement of $652 million and opened the door for an additional $6 billion in loans.
Despite its decision to leave OPEC, Ecuador will continue to support efforts to stabilize the world oil market, the ministry said.
OPEC, Russia and other producers have since Jan. 1 implemented a deal to cut output by 1.2 million bpd. The alliance, known as OPEC+, in July renewed the pact until March 2020. – Reuters