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  • A view shows the Ecuador's state-run Esmeraldas refinery complex in Esmeraldas, Ecuador, August 15, 2017

    A view shows the Ecuador's state-run Esmeraldas refinery complex in Esmeraldas, Ecuador, August 15, 2017 | Photo: Reuters

Published 9 October 2019

‘Force majeure’ refers to a clause that is included in contracts to remove liability for natural and unavoidable events that interrupt participants from fulfilling obligations.

Ecuadorean state-owned oil company Petroecuador declared Wednesday ‘force majeure’ on all crude oil trading operations and other contractual obligations that the firm maintains due to ongoing protests against Lenin Moreno’s government across the country.

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Ecuador’s Indigenous People Deny Moreno's Claims of Dialogue

‘Force majeure’ refers to a clause that is included in contracts to remove liability for natural and unavoidable events that interrupt participants from fulfilling obligations, thus serving as an as a justification to avoid fines or penalties for breaches. 

The measure will last as long as the country remains under protests. The company estimates that to date there up to US$12.8 million in losses, due to the fact that 231,800 barrels of crude oil have ceased to be produced.

Currently, Ecuador has medium-term contracts with the state-owned companies of Petroperu and Enap of Chile, and long-term contracts with the Asian firms PetroChina, Unipec, and PetroThailand.

PetroEcuador halts operations of the TransEcuadorean Pipeline System, SOTE, due to low oil stock, and a Force Majeure is declared on all contractual obligations of international trade.
 

Over the last seven days, massive protests have erupted across the country to protest against the neoliberal economic measures announced by  Moreno last week. Pichincha Universal has been reporting the incidents on the ground, especially police repression against thousands of protesters that reached Quito on Monday.  

The Ecuadorean government is implementing such policies to comply with conditions from the International Monetary Fund (IMF), an institution that will lend US$4.2 billion to this Andean country.

"What the government did is give a prize to the country's big banks and capitalists and, at the same time, a great punishment to the poor," the Workers' United Front (FUT) president Mesias Tatamuez said.

On Tuesday night, Moreno's administration publicly admitted it had accepted the mediation of the United Nations, the Catholic Church, and university authorities to establish an immediate dialogue with Indigenous organizations.

Meanwhile, the Confederation of Indigenous Nationalities of Ecuador (Conaie) denied any dialogue began with the government, despite Vice President Otto Sonnenholzner saying so on national television. 

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