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Ecuador announces it will leave OPEC in 2020

ECUADOR OIL (ADDS VIDEO) | 01 de octubre de 2019

File photo taken Oct. 19, 2017, showing Ecuador's Block 43 oil field. The smallest member of OPEC announced on Oct. 1, 2019, that it will withdraw from the international organization as of Jan. 1, 2020. EFE-EPA/ Jose Jacome FILE

Quito, Oct 1 (efe-epa).- Ecuador, the smallest member of the Organization of Petroleum Exporting Countries (OPEC), will leave the organization on Jan. 1, 2020, the country's Energy and Non-renewable Natural Resources Ministry announced.

"The decision is based on internal matters and challenges that the country must deal with related to fiscal sustainability," said the ministry in a statement in which it noted that the move is in accord with the plan of the Lenin Moreno administration to ensure the "reduction of public spending and the generation of new income."

Ecuador entered OPEC in 1973 and withdrew from the organization in 1992, but then rejoined in 2007.

"The country has always been a constructive member of the Organization and will maintain the links formed with the OPEC countries," said the ministry, adding that Quito will continue supporting "all the efforts" to seek stability in the world oil market and the efforts by affiliated entities and countries to guarantee equitable access to energy.

In the statement, Ecuador wished OPEC well in continuing the "important work" it has done since 1960 to benefit the oil-producing countries as well as oil-consuming nations.

Ecuador produces 550,000 barrels of oil per day, making it the smallest of the 14 producers in OPEC.

The production cutbacks agreed to by OPEC last year affected the government's income, which may have been a key factor in the Moreno administration's decision to withdraw from the cartel.

Oil and tax revenues are the two main sources of income in the Ecuadorian government's national budget.

The decision was made shortly before the government is to present before the National Assembly a package of economic and labor reforms in response to demands by the International Monetary Fund that Quito reduce its deficit as a precondition for receiving a $4.2 billion credit line.

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