Ecuador

Ecuador to Pump Over OPEC Oil Limit

19 Jul 2017   Ecuador

Ecuador has broken ranks with fellow OPEC members as the South American country’s energy minister said it could no longer hold up its end of an agreement to cut oil production. Ecuador is among the smallest producers in the Organization of the Petroleum Exporting Countries, but the news is a symbolic setback for the 14-nation cartel, which has…

Ecuador Abandons The OPEC Deal: Who’s Next?

19 Jul 2017   Ecuador, OPEC

Ecuador announced its withdrawal from the OPEC agreement this week, a move that could shake the foundation of a deal that was already starting to show some cracks. “We need funds for the fiscal treasury and for that reason we’ve taken the decision to gradually increase production,” Ecuadorian oil minister Carlos Perez said , according to Reuters. Ecuador is running a fiscal deficit equivalent to 7.5 percent of GDP. Low oil prices are really hurting government finances, and production restrictions only add to the pain. With oil prices having posted few gains from the deal since it was implemented at the start of the year, Ecuador decided enough was enough. It needs to produce as much as possible. Ecuador, by any measure, is not a massive oil producer. The Andean nation produced just 527,000 bpd in June, making it the third smallest OPEC producer after Equatorial Guinea and Gabon. […]

U.S. Supreme Court Backs Chevron In $9B Ecuador Pollution Case

20 Jun 2017   Ecuador

The U.S. Supreme Court on Monday denied to hear an appeal by an American lawyer to try to collect US$8.65 billion in pollution damages from Chevron, handing a victory to the U.S. oil supermajor over a pollution judgment issued in Ecuador, which lower U.S. courts had earlier agreed had been obtained via corruption. In August 2016, a U.S. appeals court blocked the enforcement of a US$9.5-billion judgment against Chevron, upholding a lower court ruling that had found that a pollution judgment against the U.S. oil major in Ecuador was the product of fraud and racketeering, and therefore, unenforceable in the U.S. In March 2014, U.S. District Judge Lewis Kaplan ruled that the case against Chevron in an Ecuadorean court was the product of fraud and racketeering orchestrated by a New York lawyer, concluding that the judgment should not be enforced. Judge Kaplan said the case had been corrupted by […]

Schlumberger sees Ecuador’s unpaid bills hurting quarterly results

29 Mar 2017   Ecuador

OPEC production cuts and economic woes are complicating Schlumberger NV’s (SLB.N) efforts to collect $1.1 billion from Ecuador’s state-owned Petroamazonas, casting a cloud over the oil services company’s first-quarter results.  “Continuing payment issues” in Ecuador are hurting earnings, Chief Executive Officer Paal Kibsgaard said in a text of a speech delivered at the Scotia Howard Weil energy conference in New Orleans on Monday.  Earlier this month, Kibsgaard wrote to Ecuadorean President Rafael Correa seeking to resolve an impasse over unpaid bills that he said was causing Schlumberger “considerable financial stress.”  Kibsgaard wrote that talks between top Schlumberger executives and Ecuadorean ministry officials since October “have made no real progress,” according to a copy of the letter seen by Reuters.  “The situation is obviously not sustainable in the long run,” he wrote, adding that Schlumberger was forced to expand debt to finance operations in the country.  Schlumberger did not respond to requests for comment.  Ecuador’s Ministry of Hydrocarbons declined to confirm the talks. The government has acknowledged some problems with payments to oil companies, without specifying which ones.

Chevron: Game up — again — in Ecuador

10 Aug 2016   Ecuador

U.S. supermajor Chevron Corp. said it was victorious in a long-running legal battle against alleged misconduct in Ecuador and a fraudulent lawyer. The U.S. Court of Appeals for the Second Court affirmed a lower court ruling that found no basis or enforceability for a $9.5 billion judgment against the company in Ecuador. “This decision, which is consistent with the findings of numerous judicial officers in the United States and South America, leaves no doubt that the Ecuadorian judgment against Chevron is the illegitimate and unenforceable product of misconduct,” R. Hewitt Pate, Chevron vice president and general counsel, said in a statement. “Chevron is pleased that the truth has prevailed over fraud and corruption.” Plaintiffs in Ecuador blamed Texaco, which Chevron […]

Chevron’s Pollution Victory Opens Door for Companies to Shirk Foreign Verdicts

10 Aug 2016   Ecuador

Chevron wasn’t the only winner in Monday’s ruling by a federal appeals court over its long-running Ecuadorian pollution litigation. The victory, in which the court affirmed that a lawyer for victims engaged in wrongdoing to secure a $9.5 billion verdict in the South American country, may benefit other corporations seeking to avoid enforcement of foreign judgments they contend are based on corrupt proceedings. Or, if you’re an anti-corporate activist, you can put it this way: “The decision hands well-heeled corporations a template for avoiding legal accountability anywhere in the world.” That’s the assessment of Deepak Gupta, the lawyer for Steven Donziger, the controversial New York attorney who’s been battling Chevron […]

Chevron Wins Big in $9.5 Billion Oil Pollution Case. But It’s Not Over Yet

The lawyer for Ecuadorian victims fails to sway a U.S. court that he didn’t act illegally. Now, more appeals in the 23-year-old case. Protesters demonstrate in front of a New York City courthouse against Chevron, on Oct. 15, 2013. Chevron couldn’t have won a more emphatic victory in its long-running Ecuadorian pollution case than Monday’s ruling by the U.S. Court of Appeals in New York. A three-judge panel unanimously affirmed a trial court’s determination that, in 2011, the lead attorney for some 30,000 Ecuadorians had won a $9.5 billion judgment against Chevron by means of bribery, coercion, and fraud. The energy company will probably leverage the ruling as part of its continuing effort to avoid paying a dime on the verdict. Chevron lacks any property or assets in Ecuador, so it simply refused to pay the plaintiffs there. The Ecuadorians, meanwhile, have sought to enforce their award in Canada, […]

U.S. Supreme Court Backs Chevron in Treaty Dispute with Ecuador

7 Jun 2016   Ecuador

Chevron offices The United States Supreme Court declined to hear an appeal lodged by the government of Ecuador that contested a $96 million arbitration settlement awarded to the American oil company Chevron. Texaco, the company Chevron bought out in 2001, originally filed the suit against the Central American country for breaking from the terms of oilfield development contracts and international agreements. In effect, the highest court in the U.S. upheld a ruling by the U.S. Court of Appeals for the District of Columbia Circuit, which favored Chevron in an arbitration deal issued by The Hague’s Permanent Council of Arbitration in the Netherlands. Related: Saudi Arabia Raises Oil Prices to Asia But Cut Prices to Europe The arbitration process started in The Hague in 2006 with Texaco claiming that Ecuador’s court system failed to resolve disputes in a timely manner, as the nation had agreed to in a 1997 investment […]

Ecuador oil minister says OPEC should cut crude output to support prices

3 Dec 2015   Ecuador

Ecuadorean oil minister Carlos Pareja Tuesday said he wanted OPEC to reduce its crude output ceiling by under 2% to provide support for global oil prices. In Vienna ahead of Friday’s OPEC meeting there, Pareja said “if Ecuador’s proposal to diminish production by less than 2% receives support in OPEC, there’s a certainty that the international [crude] market will improve” for producers. Pareja’s comments were reported in an Ecuadorean oil ministry statement. Ecuadorian officials called for the 2% reduction late last week. During an Arab-South American summit in Saudi Arabia mid-November, Ecuador’s populist president, Rafael Correa, recommended an OPEC output cut of 2 million b/d, or 1.6% of daily average output. At the time, Correa acknowledged it would be difficult to get the oil cartel to agree on the reduction. Pareja is holding bilateral meetings with other OPEC members Wednesday and Thursday, as well as with OPEC Secretary General […]

Ecuador Enters Recession as China Loans Fail to Offset Oil

1 Oct 2015   Ecuador

Ecuador’s economy slipped into recession in the second quarter for the first time since 2009 as the government struggles to borrow enough money to offset the global oil slump. Gross domestic product shrank 0.3 percent from the previous three months, after contracting a revised 0.1 percent in the first quarter, central bank General Manager Diego Martinez said Wednesday to reporters in Quito. From the year earlier, the economy expanded 1 percent. Ecuador is running out of money. Its use of the U.S. dollar as its official currency means increased dependence on foreign loans as the slump in oil prices cuts the value of exports. The local money supply has shrunk by about a quarter this year, while the trade deficit has swelled to a record. To make matters worse, expected loans from China, the nation’s biggest foreign creditor, haven’t come through as fast as forecast, forcing the government further […]

Ecuador’s Oil Export Revenue Falls 44% in January

7 Mar 2015   Ecuador

Ecuador’s crude oil export revenue totaled $598 million in January, down about 44% from a year earlier, due to lower oil prices, the central bank said on Friday. Lower oil prices are expected to drag down economic growth, in a country whose oil sector generates about one-quarter of total government revenue and about a half of exports. Economists say Ecuador’s economy will likely grow between 1% and 2% this year. The average price of crude oil in January decreased 55% to $41.40 a barrel from the previous year. In terms of volume, Ecuador exported 11.57 million barrels of crude oil in January, a 25% increase from a year earlier and an increase of about 8% from December. All of the oil was exported by Ecuador’s state-owned companies. Crude oil is Ecuador’s main export, which the Andean country sends primarily to Asia, the U.S. and the Caribbean. The central bank […]

Ecuador Plans Budget Cuts, New Debt as Oil Drop Saps Revenue

11 Dec 2014   Ecuador

Ecuador , which relies on crude for about a third of its budget, plans to cut spending next year by as much as $1.5 billion and will seek additional financing after prices for the OPEC member’s oil fell to five-year lows. The South American nation will trim current and investment spending and use credit lines from multilateral lenders to offset lower oil prices , the Finance Ministry said yesterday in an e-mailed response to questions from Bloomberg News . Ecuador is also planning tax reforms to boost government revenue and accelerate private investment and may seek additional financing if crude doesn’t stabilize next year, the ministry said. Government bonds extended their declines today. With prices for the nation’s Oriente crude down 23 percent since congress approved President Rafael Correa ’s 2015 budget proposal on Nov. 20, the government has said it would reduce funds for new schools and police […]

Ecuador to Top 2014 Oil Output Target, Official Says

3 Dec 2014   Ecuador

Ecuador expects to surpass by about 3% its initial oil production target set for 2014, reaching an average of 560,000 barrels a day, a high-level government official said. “Our goal for production in 2014 was an average of 545,000 barrels a day, but we will produce about 560,000 barrels a day,” Minister of Non Renewable Natural Resources Pedro Merizalde said in an interview. According to the central bank, Ecuador’s average oil output rose 7% to 555,000 barrels a day between January and September, from 520,000 barrels a day a year earlier. State-run companies Petroamazonas and Rio Napo accounted for 76% of Ecuador’s crude oil production in the period. For next year, the Andean country expects to reach an output of 566,000 barrels a day, before jumping to about 700,000 barrels a day in 2019, when oil block 43, also known as ITT, will be producing oil. Last year President […]

Ecuador, Venezuela to Call on OPEC to Comply With Output Ceiling

18 Nov 2014   Ecuador, OPEC, Venezuela

Ecuador and Venezuela plan to call on the Organization of the Petroleum Exporting Countries to comply with its production ceiling of 30 million barrels of oil a day as a measure to cut overproduction and support oil prices, a high-ranking Ecuadorean government official said.  “The fall in oil prices affects everyone, producers and consumers,” Pedro Merizalde, Ecuador’s minister of nonrenewable natural resources, said Monday in an interview. “An option to recover the price is to cut overproduction.”  Ecuador and Venezuela will submit the proposal during OPEC’s meeting on Nov. 27.  Ecuadorean President Rafael Correa said recently that Ecuador and Venezuela should have a common position and proposal for protecting prices at the next OPEC meeting.

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Oil in the Amazon: Who stands to win and lose?

1 Oct 2014   Ecuador

 Looking high into the treetops, Sebastian Ramirez searched for familiar faces. For the past year, he’s been following a group of spider monkeys. Each day, he and his team track one of them and take notes. “We do what they do,” Ramirez said. “When they rest, we rest. When they move, we move.” Apart from recording the monkeys’ behavior and noting their movements via GPS, the biologists have one main task as they continue their decade-long study. “We never interfere with the animals,” he said. “Particularly because we’re in such a pristine environment.” A female spider monkey named Eva led a small troupe through the forest canopy looking for fruit. Seeds rained down on the biologists as the monkeys stopped to eat. After a […]

Eni makes major oil find in Ecuador

19 Sep 2014   Ecuador

Italian energy company Eni said Thursday it made an oil discovery in Ecuador that could hold as much as 300 million barrels in place. Eni announced the discovery at the Olgan-2 exploration well. Drilling encountered a 236-foot column of crude oil and initial production tests yielded a flow rate of 1,100 barrels of oil per day. “Early estimates suggest that the Oglan discovery potentially contains about 300 million barrels of oil in place,” the company said in a statement. Ecuador has the third largest oil reserves in South America after Venezuela and Brazil. A member of the Organization of Petroleum Exporting Countries, it exports an average 388,000 bpd and produces around 526,000 bpd. Eni said the discovery was made less than 10 miles away from processing facilities already producing about 12,500 bpd. The Italian company stressed its work in the Amazon rainforest in […]

State Oil Firms to Invest $400 Million in Ecuador Oil Block

13 Sep 2014   Ecuador

State-run oil companies from Ecuador, Chile and Belarus plan to invest about $400 million to explore and develop the 490,000-acre Block 28 oil concession in southeast Ecuador. Ecuador’s Petroamazonas will have a 51% stake in the project, while Sipetrol SA, a unit of Chile’s state-owned Empresa Nacional de Petroleo, or Enap, will own 42% and Belarus’s Belorusneft will have the remaining 7%. About $30 million of the planned investment will come from Sipetrol and Belorusneft and will go into exploration. The companies plan to conduct exploration over a three-year period, and anticipate to produce oil from the block for over 15 years. The remaining $370 million investment, which will be used for production, will come from the three state oil companies, with their share of investment based on their stakes in the project. Petroamazonas General Manager Oswaldo Madrid said exploration work will begin in January 2015. Ecuador, the smallest […]

Ecuador to Sign $7B Oil-Refinery Financing Deal With China

27 May 2014   Ecuador

After about three years of negotiations, the government of Ecuador is preparing to sign a financing deal with China, valued at about $7 billion, to finance a new oil refinery known as the Refineria del Pacifico, an official said. The $10 billion refinery will process 200,000 barrels of crude oil a day. Thirty percent of the funds needed will come from the project’s partners and the remaining 70% will be financed by a group of Chinese banks headed by the Industrial & Commercial Bank of China Ltd. 601398.SH +0.57% An official close to the deal, who asked not to be named, said Friday that the government of Ecuador will sign the financing deal, the first tranche of which will consist of about $2.5 billion and will be disbursed soon. The official said a high-level delegation of officials from China have been finalizing details in Quito, and President Rafael Correa […]

Ecuador to Sign Oil-Refinery Financing Deal With China

24 May 2014   Ecuador

After about three years of negotiations, the government of Ecuador is preparing to sign a financing deal with China, valued at about $7 billion, to finance a new oil refinery known as the Refineria del Pacifico, an official said. The $10 billion refinery will process 200,000 barrels of crude oil a day. Thirty percent of the funds needed will come from the project’s partners and the remaining 70% will be financed by a group of Chinese banks headed by the Ltd. An official close to the deal, who asked not to be named, said Friday that the government of Ecuador will sign the financing deal, the first tranche of which will consist of about $2.5 billion and will be disbursed soon. The official said a high-level delegation of officials from China have been finalizing details in Quito, and President Rafael Correa will announce the deal Saturday during his […]

Ecuador Says No National Referendum on New Amazon Oil Development

7 May 2014   Ecuador

Ecuador’s national electoral council said Tuesday that opponents of new oil development in a national park in the Amazon rain forest failed to submit enough valid signatures to force a nationwide referendum. The electoral council said that only 359,761 signatures of the 756,000 that were submitted by a coalition opposed to the oil activity passed the validation process. The law required them to collect 584,000 signatures, which is equivalent to 5% of the electorate, to force a referendum on the issue. The announcement appears to be a victory for President Rafael Correa and his plans to drill for oil in an area known as the Ishpingo-Tambococha-Tiputini, or the ITT block. A portion of the block is located in the Yasuni national park, which is considered by scientists to be one of the most biologically diverse spots in the world. The president of the electoral council, Domingo […]

Ecuador January Crude-Oil Export Revenues Down 10% on Month to $1.06 Billion

6 Mar 2014   Ecuador

Ecuador’s crude-oil export revenues totaled $1.06 billion in January, down 10% from December, the central bank said Wednesday. In terms of volume, Ecuador exported 11.57 million barrels of crude oil in January, a 12% decrease from the previous month. Crude oil is Ecuador’s main export, which the Andean country sends primarily to Asia, the U.S. and the Caribbean. The average price of crude oil in January increased 1% to $91.40 a barrel from the previous month. All of the oil was exported by Ecuador’s state-owned companies. The central bank also said Ecuador produced 17.05 million barrels of crude oil in January. Petroecuador, Petroamazonas and Rio Napo, the three state-run oil companies, produced 13.21 million barrels in January, while private companies produced the remainder. According to official projections, Ecuador could produce about 741,000 barrels of crude oil per day by 2019. Reaching this goal will require investments […]

Ruling Gives Oil Giant Boost in Fight Against $9.5 Billion Ecuadorean Judgment

5 Mar 2014   Ecuador

A federal judge ruled that a record $9.5 billion environmental-damage award against Chevron Corp. was tainted by the misdeeds of a lawyer leading the lawsuit, giving the oil giant a boost in its battle against a global effort to seize its assets. In the latest twist in one of the longest-running legal battles in corporate history, U.S. District Judge Lewis Kaplan found that New York lawyer Steven Donziger and his litigation team engaged in coercion, bribery, money laundering and other misconduct aimed at securing a 2011 verdict against the company in Ecuador. The judge’s decision bars Mr. Donziger and his two Ecuadorean co-defendants from profiting from the award and excoriates the plaintiffs’ attorney, who has spent the bulk of his legal career pursuing the case. The judge concluded that Mr. Donziger and his team fabricated evidence, promised $500,000 to an Ecuadorean judge to rule in their favor, ghostwrote much […]

Ecuador 2013 Crude Output Rises 4% on Year to 526,000 Barrels a Day

22 Feb 2014   Ecuador

Ecuador’s average oil output rose 4% to 526,000 barrels a day last year, from 504,000 barrels a day the same period a year before, the central bank said. Petroecuador, Petroamazonas and Rio Napo, the three state-run oil companies, accounted for 75% of Ecuador’s crude oil production in the period. The country’s total oil production last year was 192 million barrels. Ecuador’s crude-oil output in December increased about 9% from the one year earlier to an average of 548,000 barrels per day. Oil is Ecuador’s main export and the government’s main revenue earner. According to official projections, Ecuador could produce about 741,000 barrels of crude oil per day by 2019. Reaching this goal will require investments of about $5.5 billion per year over the next five years. Last August, President Rafael Correa announced that his government will go ahead with the development of the Ishpingo-Tambococha-Tiputini oil field, […]

Ecuador, China advance refinery plans

25 Jan 2014   Ecuador

China National Petroleum Corp. (CNPC) and the Ecuadorean government have reached an agreement regarding cooperation in a plan to construct a long-delayed refinery on Ecuador’s Pacific Coast ( OGJ Online, Feb. 4, 2008 ). On Jan. 21, Ecuador’s Vice-President Jorge Glas and CNCP Chairman Zhou Jiping reached a joint-approval of the feasibility report for the Refineria del Pacifico (RDP), according to a release from Ecuador’s government. During a second meeting on Jan. 23, Glas further solidified the deal with representatives of Industrial and Commercial Bank of China, who expressed an interest in handling financing for CNPC in the refinery project , Glas said. This latest arrangement, for which no official financial details have been disclosed, follows the signing of June 2013 of a framework agreement between Ecuador and CNCPC on integrated cooperation in developing RDP. While no firm timetable was available regarding final funding for RDP, once realized, the […]

Ecuadoreans Can Attempt to Seize Chevron’s Canada Assets

18 Dec 2013   Ecuador

Ecuadoreans trying to collect a $9.5 billion environmental verdict against Chevron Corp.  can attempt to seize the oil giant’s assets in Canada, a Canadian appellate court ruled on Tuesday. The plaintiffs, residents of Ecuador’s jungles, are seeking to enforce a 2011 judgment against Chevron by confiscating its properties in other countries where it operates. In May, a lower court in Ontario held that the Ecuadorean judgment didn’t […]

How China took control of an OPEC country’s oil

27 Nov 2013   China, Ecuador

China’s aggressive quest for foreign oil has reached a new milestone, according to records reviewed by Reuters: near monopoly control of crude exports from an OPEC nation, Ecuador. Last November, Marco Calvopiña, the general manager of Ecuador’s state oil company PetroEcuador, was dispatched to China to help secure $2 billion in financing for his government. Negotiations, which included committing to sell millions of barrels of Ecuador’s oil to Chinese state-run firms through 2020, dragged on for days. Calvopiña grew anxious and threatened to leave. “If the Phase III transaction documents are not signed in the coming days, then I cannot remain in Beijing,” he wrote in a confidential letter to China Development Bank (CDB), reviewed by Reuters. In reality, Calvopiña had little choice but to wait. Shunned by most lenders since a $3.2 billion debt default in 2008, Ecuador now relies heavily on Chinese funds, […]

Ecuador Spent $2.77 Billion on Fuel Subsidies During January-Sept

19 Nov 2013   Ecuador

Ecuador spent about $2.77 billion on fuel subsidies for the January-September period, including high-octane naphtha, diesel and gas for cooking, the central bank said. The amount represents a 13% increase from the same period last year. During the first nine months of 2013, Ecuador imported a total of $4.14 billion in oil derivatives. Of the total spent on oil subsidies, about 49% went to diesel, 36% to high-octane naphtha and 15% went to cooking gas. According to official data, the main beneficiaries of the subsidies in Ecuador are high-income earners, due to their energy-consumption levels. Last year, the government spent about $3.4 billion in fuel subsidies. Currently, the government is reviewing its policy of subsidizing fuel to refocus the approach. Patricio Rivera, minister coordinator for Economic Policies, said recently in an interview the option to refocus fuel subsidies would be to set consumption quotas, and those […]

Attorney Takes Stand in Chevron Case

19 Nov 2013   Ecuador

New York lawyer Steven Donziger was the mastermind behind a litigation team that spent more than $21.4 million to allegedly extort billions from Chevron Corp. over environmental damage claims in Ecuador’s Amazon Basin, a lawyer for the oil giant said Monday. Mr. Donziger took the stand in federal court in Manhattan to defend himself against racketeering charges brought by Chevron. Observers in the packed courtroom included […]

Ecuador Sends Request to The Hague to Dismiss Chevron Arbitration Process

16 Nov 2013   Ecuador

 Ecuador Attorney General Diego Garcia has asked an international arbitration tribunal at The Hague to suspend a process brought by Chevron Corporation (CVX) against the Andean country, the official’s office said Friday. The U.S oil company faces in Ecuador a $9.5 billion ruling against it in a trial brought by indigenous people of the Ecuadorean Amazon in a court in the country’s Sucumbios province. Chevron inherited the lawsuit in 2001 when it acquired Texaco Inc., which had operations in Ecuador from 1964 until 1992. Ecuadorean indigenous people claim that Texaco caused environmental damage by polluting the rainforest and rivers, and also caused personal injuries. Chevron denies the allegations. Chevron requested arbitration in 2009 under international law, claiming that Ecuador was violating the terms of a bilateral investment treaty with the U.S. Last year the tribunal decided to hear Chevron’s claims against Ecuador. On Tuesday, Ecuador’s National […]

Ecuador Court Affirms and Halves Chevron Judgment

13 Nov 2013   Ecuador

QUITO, Ecuador—Ecuador’s highest court affirmed an environmental verdict against Chevron Corp  but cut the judgment against the oil giant in half. Ecuador’s National Court of Justice ruled late Tuesday that Chevron must pay $9.5 billion to plaintiffs in the country’s rainforests over decades-old contamination. The verdict had stood at $19 billion, but the court tossed out punitive damages that were imposed in 2011 after Chevron refused to apologize […]