OREANDA-NEWS.  Ecuador's finance ministry has reduced its 2016 crude export forecast by 15.3pc to 357,800 b/d compared with a 422,740 b/d projection for 2015.

Real crude exports averaged 426,189 b/d in January-September 2015, according to the latest central bank figures.

Exports will drop because state-owned PetroEcuador's 110,000 b/d Esmeraldas refinery will resume full operations by the end of this month following a major turnaround.

Crude production fell by 1.87pc to 545,500 b/d in January-September this year compared to the same period of 2014, with a flat projection for 2016.

Next year Ecuador plans to "maintain oil output at the 2015 levels and avoid an aggressive reduction. We will seek financing for some projects and transfer funds if necessary [to state-owned upstream unit PetroAmazonas] to lessen the budgetary tightness," says finance minister Fausto Herrera.

Because of lower oil prices, PetroAmazonas' capital expenditure was cut to $2.2bn this year from $3.4bn in 2014. The company says it will continue to operate on a tight budget next year.

Herrera acknowledged that Ecuador has abandoned the idea of an international bond issuance by PetroAmazonas or PetroEcuador to help finance investment projects.

"If Ecuador's country risk remains high it's impossible for state-owned companies to go abroad and seek funding," Herrera said, adding that the government is aggressively pursuing a reduction of Ecuador's risk. Quito hopes for an economic rebound in second half 2016.

Herrera said Ecuador has accumulated a $300mn debt with foreign oil companies, which operate under fee-based contracts since 2011.

The fee-based contracts include a carry-forward clause implying that if oil prices drop below an equilibrium level the state will suspend fee payments until prices recover.

The finance ministry late last week submitted a $30bn budget proposal for 2016 to Ecuador's national assembly which should approve it within a month.

Herrera says the draft is "very austere" compared to the $34.1bn 2015 budget which was originally set at $36.3bn and later trimmed by $2.2bn.

The 2016 budget is based on 1pc GDP growth, a 3.3pc inflation target, a 2.4pc fiscal deficit goal and an oil price assumption of $35/bl, down from the $79.70/bl in the original 2015 budget.

Ecuador has also reduced its projected spending on all subsidies from $5.9bn in 2015 to $3.1bn this year with $1.9bn earmarked for fuel subsidies.

The restoration of Esmeraldas refinery operations will reduce fuel imports next year. The finance ministry forecasts imports of refined oil products of close to 129,590 b/d, down from the 153,424 b/d imported in January-September 2015 and from a 165,753 b/d projection for 2015.