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OPEC officially acknowledges Ecuador exit

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OPEC officially acknowledges Ecuador exit

Vienna — In a communique released after its meeting in Vienna, OPEC officially acknowledged that Ecuador had left the oil producers' organization effective January 1, 2020.

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Sources had told S&P Global Platts that OPEC was pushing Ecuador to reconsider its withdrawal from the group.

There were also reports that Ecuador was wavering on its OPEC exit but sources said they were not expecting the oil producer to reverse course so soon.

Ecuador surprised OPEC in October by announcing its withdrawal effective the end of last year, citing its need for higher revenue that had been crimped by the group's oil cuts.

Ecuador first joined OPEC in 1973 and then had a hiatus from 1992 to 2007.

New energy minister Jose Agusto, who was named to the post on November 19, replacing Carlos Perez, did not attend this week's OPEC meeting in Vienna, according to sources.

OPEC has agreed to a plan to cut 1 million b/d of its own crude oil production and lobby Russia and nine other non-OPEC partners to slash 500,000 b/d of their output for a total reduction of 1.5 million b/d through the second quarter.

Austerity measures

Ecuador implemented new austerity measures to comply with the terms of a $4.2 billion loan from the International Monetary Fund and said it could no longer continue with its OPEC membership as it sought to "reduce public suspending and generate new income" in the name of "fiscal sustainability," according to its energy ministry at the time.

Ecuador pumped 550,000 b/d in February , according to the latest S&P Global Platts OPEC production survey. The country's quota under the 2019 output deal was 508,000 b/d.

In November, the country witnessed widespread protests against the austerity measures, which disrupted production and caused state oil company Petroecuador to declare force majeure on exports.

The protests cost the Ecuadorian economy $137 million, including repairs to damaged oil fields, the energy ministry has said. Production has now been fully restored.