CAPITAL: Quito
MONETARY UNIT: Sucre
REFINING CAPACITY: 176,000 b/d
OIL PRODUCTION: 371,500 b/d
OIL RESERVES: 2.1 billion bbl
GAS RESERVES: 3.7 tcf
Low oil prices rocked Ecuador`s economy, and the government was in an austerity mode as 1999 began.
Price recovery mitigated conditions somewhat during the year, but the country still had difficulties, particularly a pipeline bottleneck that limited oil exports to less than production capability.
Early in 2000, economic pressures became political upheaval when protestors accompanied by military officers stormed government buildings, forced Pres. Jamil Mahuad to flee, and replaced him with Gustova Noboa, formerly vice-president.
Before the rebellion, Ecuador was seeking outside investment to push several strategic projects in 2000-01.
One project was a heavy-oil pipeline. Government officials indicated that they expected a group of traditional operating companies to build the line, but no announcement materialized.
Then reports surfaced in June that Alberta Energy Co. Ltd., which had just bought Pacalta Resources Ltd. for $973 million, was considering installing the $500 million pipeline by mid-2001. AEC said the Pacalta properties could produce 80,000 b/d but were limited to 45,000 b/d by the existing system.
Other goals: Bid out the Ishpingo-Tiputini-Tambococha heavy oil development in the Oriente basin, and pick firms to operate the five mature oil fields that yielded most of Petroecuador`s output (Shushufindi, Sache, Libertador, Auca, and Cononaco). Also, license 11 southern Oriente and three Gulf of Guayaquil blocks, and outsource operation of the La Libertad refinery.
Cost projection was $2.8 billion to boost production to 700,000-750,000 b/d, but this could not be attained without completion of the second heavy-oil pipeline. Its future dominated Ecuador`s agenda.
Late in the year, Arco agreed to sell giant, recently-started Villano oil field and other South American assets to Burlington Resources. Arco`s 40% partner Agip, however, exercised preferential rights and acquired the rest of Villano. BR pursued the other blocks.
Meanwhile, Samedan Oil`s Energy Development Corp. unit committed to develop Amistad gas field in the Gulf of Guayaquil. EDC signed a 15-year pact with Petroecuador to develop the 177 bcf of reserves.
Only 2-4 rigs operated in the country most of the year.
