OREANDA-NEWS. Ecuadorean state-owned oil company PetroEcuador will prioritize investments in its Pascuales-Cuenca pipeline and the 110,000 b/d Esmeraldas refinery amid low crude prices.

US benchmark WTI near $40/bl is a "grave" problem for producers, said PetroEcuador's general manager Carlos Pareja Yannuzzelli yesterday in a statement.

Ecuador?s oil export revenue dropped by $2bn in the first quarter and the annual loss could reach up to $7bn, according to President Rafael Correa. PetroEcuador's budget was nearly halved to $587mn this year, compared to $1.17bn in 2014.

Ecuador's finance ministry revealed last week a fresh $800mn reduction in the country's $34.9bn overall budget. The budget had already been trimmed by $1.4bn in January 2015.

While prices remain low, the company will back out of "unnecessary" investments and prioritize the construction of the 217km Pascuales-Cuenca multipurpose pipeline intended to eliminate the need to truck fuel as well as the rehabilitation of the Esmeraldas refinery.

PetroEcuador will decrease fuel imports by 20,000 b/d when Esmeraldas becomes fully operational, which is expected in November. The refinery project is 92pc complete, the company said.

Meanwhile, it will trim the budget for additional construction and infrastructure projects.

Ecuador was previously in talks with China's state-owned Sinomach and South Korea's Hyundai to build a $10.5bn, 200,000 b/d refining complex. The refinery had initially been scheduled to begin operations in 2013 with 300,000 b/d of capacity, but the deadline was later extended to 2017 and the capacity was scaled back.