[skiwi]

One of South America's poorest countries, Ecuador, is believed to be sitting on huge untapped reserves of oil and gas.
Much of it, though, lies beneath remote areas of the Amazon rainforest...
In global oil terms, Ecuador is a relatively small player. But revenues from its existing Amazon oil reserves are critical in keeping the country's economy afloat.
Now, with the country sitting on huge potential new reserves, there is enormous pressure to expand production.
Ecuador tribes vow to fight oil threat

[uNkNowN ElEmEnt]

QUITO, Ecuador, Aug 17 (Reuters) - Ecuador's government will declare a state of emergency in two Amazon provinces where protests have cut crude oil production by state-owned Petroecuador to 29,400 barrels per day from the usual 201,000 bpd, officials said on Wednesday.

Interior Minister Mauricio Gandara said the state of emergency will be declared by President Alfredo Palacio. Under a state of emergency the rights to free association and expression could be restricted and security forces would be allowed to retake control of oil fields.

Petroecuador's crude production has fallen to 29,400 bpd since residents of Sucumbios and Orellana provinces began invading oil camps and blocking highways on Monday, a company official said.

The protesters are demanding foreign oil companies operating in the region provide financing for infrastructure projects and more job opportunities. <snip>

http://today.reuters.com/investing/fina ... DATE-4.XML

Funny, Donald Rumsfeld is visiting down there. Now what would the US government be doing visiting at this time? just good timing?

link edited

[SD_Scott]

Those neocons (emphasis on "cons") are a nosey lot aren't they.

[BabyPeanut]

Ecuador was never an oil heavyweight in the first place.

Ecuador flirted with OPEC membership for a few years, before realising that it had insufficient capacity to justify restricting production to support global price.

http://www.peakoil.ie/newsletters/191

Ecuador govt declares state of emergency for Amazon oil protest
Bollocks News
UPDATED: 13:36, August 18, 2005

The Ecuadorian government declared a state of emergency in two Amazon provinces of Sucumbios and Orellana after protesters caused severe disruption to the country's oil production to press their demand for greater spending on infrastructure and social programs.

The government "has an obligation to protect oil installations, the airports and has to guarantee public security," Interior Minister Mauricio Gandara said after declaring the state of emergency.

The measure triggered a violent reaction in Lago Agrio, 180 km northeast of Quito.

Local television broadcasted footage of residents attacking a municipal building, smashing windows and looting computers, books and other office supplies.

Residents of the two Amazon provinces in Ecuador's northeast Amazon obstructed the main roads leading to oil fields in the zone since Sunday morning, and the protests also shut down operations at two provincial airports.

Some 3,000 soldiers and police were in the zone to force out protesters who had taken over about 250 wells, authorities said.

Officials at state-run oil company Petroecuador said crude oil production had dropped 90 percent from 202,500 barrels to 20,000 barrels, causing losses of about 12 million US dollars in revenue from Monday to Wednesday.

Source: Xinhua

http://english1.people.com.cn/200508/18 ... 03279.html

[Colorado-Valley]

From the BBC:

Protests halt Ecuador oil exports

Ecuador's state oil company says it is suspending crude oil exports following five days of protests in two provinces that have slashed production.
Hundreds of demonstrators in Sucumbious and Orellana have occupied oil installations and airports.
They want more of the country's oil money to be spent on infrastructure and new jobs. Ecuador is the fifth biggest oil producer in South America.
The government has declared a state of emergency in the region.
Quito called in the army, which has used tear gas to disperse some of the protesters.
The unrest has resulted in dozens of injuries.
"Our instructions are to restore order, affirmative," the general in charge of the operation told Reuters news agency.
However, a senior official in Sucumbios said his province's people were in revolt.

(So ... will this protest affect the oil markets tomorrow?)

[UIUCstudent01]

That's from this EIA fact sheet thing.

It seems to me that it Ecuador had ramped up production a bunch recently... this definitely has the possibility to send prices rocketting....

QUITO, Ecuador, Aug 17 (Reuters) - Ecuador's government will declare a state of emergency in two Amazon provinces where protests have cut crude oil production by state-owned Petroecuador to 29,400 barrels per day from the usual 201,000 bpd, officials said on Wednesday.

From Reuters

I wonder if Saudi Arabia has some spare capacity to pick up the slack..

Edit: Maybe this is why oil prices went near $67 dollars... then fell because of this news:

Ecuador, the second largest South American supplier of oil to the United States, normally pumps around 530,000 bpd of crude including output from private companies.

Some foreign oil companies also have reported protesters invading their fields and obstructing access roads. Oil installations in the remote Amazon region are susceptible to attacks because they are surrounded by jungle.

Despite the demonstrations, Petroecuador on Wednesday restarted its Transecuadorean crude pipeline, which normally pumps around 350,000 bpd. The pipeline was shut on Tuesday afternoon by protesters.

So this is old news?

[UIUCstudent01]

The BBC article is dated Friday. So I guess he's closing the exports again?

Oh boy!

I definitely think that oil will go up again if that is the case. (Hopefully the BBC isn't reporting tuesday's news or something??)

[I also found some context to put this all in - Ecuador Tribes to fight Oil Threat]
It seems something is definitely sparking there..

[Colorado-Valley]

Things are happening in Latin America. Chavez in Venezuela has been pushing the "Bolivaran Revolution" under which native peoples will take their resources back from the multi-nationals who have been grabbing their oil and gas while leaving poverty and pollution for decades.

A similar peasant revolt happened in Bolivia only a few weeks ago.

Read Chalmers Johnson's wonderful book, "The Sorrows of Empire," if you want a real eye opener about the U.S. global empire, its ties to the multi-nationals, world bank and IMF, and the pain and suffering this conspiracy is causing all around the planet.

You'll never look at Halliburton, Brown & Root and the Bush Family the same way again.

[DantesPeak]

The downside of the PO slope may not be smooth.

As mentioned above, Chavez of Venezuela seems to be encouraging states to seize more control of their energy resources. Yet Venezuela, like even Saudi Arabia, expects Western interests to finance new production facilities. Venezuela has a $56 billion plan, and SA a $50 billion one.

Why did I have the feeling that some of these projects won;t get off the ground?

[Specop_007]

It doesnt matter. Remember, the problem isnt crude exports, its refining capacity.

[Bleep]

Ecuador Declares Emergency as Strike Slashes Output (link)

March 8 (Bloomberg) -- Ecuador, South America's fifth- largest oil producer, called a state of emergency for its oil- rich Amazon region for the second time this year as a strike by oil workers slashed output.

Army units took control of oil facilities as a preventive measure after the decree was issued late yesterday, Rigoberto Medina, a spokesman for the government ministry, said in a telephone interview from Quito. Talks continue between striking contract workers and the government, he said.

``This strike is costing the government millions of dollars a day,'' Medina said. ``The state of emergency will be in effect until we reach an agreement with the workers.''

Ecuador, which is the U.S.'s 11th-largest oil supplier, called a similar state of emergency last month to stem violent disturbances in the Amazon that disrupted operations and shipments. This prompted the state oil company to declare force majeure, which enables the company to miss contracted deliveries because of circumstances beyond its control.

State oil company PetroEcuador's output has fallen 72 percent since the strike began yesterday, the company said in a press statement.

Ecuador Oil Workers End Strike After Six Days (link)

Oil workers in the Ecuadorean Amazon whose six-day strike caused a sharp drop in oil production and millions of dollars in losses agreed Sunday to return to work, an official said.

...

Vega said that Petroecuador's production is now close to 160,000 barrels a day after dropping to around 50,000 barrels on March 7. Daily state oil production is usually around 200,000 barrels.

...

Ecuador normally produces about 535,000 barrels of crude daily between state and private companies...

[skiwi]

Eucador moves against US oil giant

ECUADOR began today to take over operations of US oil giant Occidental Petroleum Corp, the latest move in Latin America against foreign energy producers after nationalisation in Bolivia and growing state intervention in Venezuela.

Ecuador revoked Occidental's contract yesterday after accusing it of transferring part of an oil field without authorisation. Occidental said it has complied with its obligations and still hopes to settle...

[pogoliamo]

Einmal ist Keinmal

[gn0s1s]

I wanted to pass along something from the "inside"...
I will post the most relevant sentences from an article, taken from the newspaper, "la Hora," of the province Tungurahua dated Aug 6, 2007.
The original Spanish will be listed along with my translation into English so you can translate it yourself if you disagree with my own.
Here is a link to the article in electronic form, but I am typing up this posting using the paper version which I bought today: Article

The title of the article is:"El sector petrolero esta frenado"
(The petroleum sector has put on the brakes)
The subtitle of the paper article states: "La incertidumbre politica y economia del pais no han contribuido para adecuar un ambiente que atraiga las inversiones."
(The political and economical uncertainty of the country have not contributed to an environment that attracts investments.)

First, the article discusses the growth of the economy, which as far
as I can tell seems to be mirroring the growth in the USA (slightly
above 0%). We use the US dollar down here, so inflation and dollar
devaluation affect us here as they do up there. Other things do factor into the economic growth, of course, but that is not relevant right to the post...
Regarding oil exports, it states: "La produccion petrolera publica se ha reducido de manera casi constante en los ultimos meses, incluyendo la correspondiente al bloque 15, lo que junto a la baja de precio del petroleo, en relacion a 2006, ha implicado la disminucion de las exportaciones petroleras (21% al comparar el periodo enero-mayo de 2006 con el de 2007)."
(The public production of oil has gone down in a nearly constant manner during the last few months, including the corresponding Block 15, which along with the the lowering of the price of oil, in relation to 2006, has created the lowering of oil exportations [21% comparing the period Jan thru May of 2006 to that of 2007]).

Because I live here, I can see that the economy is growing slightly (only 0.08%) and more and more people are own cars. Add the lack of investment into the oil production here due to the political instability (angry, tempermental president; taking away oil rights from US companies in the past year) and you have a nice example of Export Land Model, I believe it is called?
Either way you take it, I thought I would be helpful and publish an article from within the country itself, so you can see what they are saying internally.
Admitting a 21% drop in oil exports, year over year, is pretty fascinating.
PS. The online version does include the graphic illustrating Ecuador's oil exportation levels over the past 2 years, along with the oil prices. A nice roller-coaster that eerily mirrors price levels.

[Jack]

Thank you, gn0s1s. And welcome to Peak Oil!

Jack.

[steam_cannon]

Great find gn0s1s!
The article: http://www.lahora.com.ec/frontEnd/main. ... ion=602962

Online Translator: http://babelfish.altavista.com/
"Other factors of incidence
Public the oil production has been reduced of almost constant way in the last months, including the corresponding one to block 15, which next to the loss of price of petroleum, in relation to 2006, has implied the diminution of the oil exports (21% when comparing the period January-May of 2006 with the one of 2007)."

Full Translated Article

The oil sector is restrained
13:06 - 6 of August of 2007



The Ecuadorian economy grew less of the one percent (0,08%) during the first trimester of this year, according to last numbers spread by the Central bank of Ecuador (BCE). To criterion of the understood ones, great part of this deceleration obeys to the fall of the production of crude of Petroecuador, and if urgent actions are not taken, this economic tendency could stay throughout the year.
Nevertheless, the regime hopes, in which it reduces of the year, power to change the oil situation of the state one with greater investments in this sector, the renegotiation of oil contracts, and with an impulse, mainly, to the microeconomy and the microfinances.

Nonoil sectors yes grew
For Ricardo Estrada, executive president of the Corporation for the Promotion of Exports and Inversiones (Corpei), is necessary to separate this diagnosis, because in the nonoil sectors if growth existed.
Esteem, then, that the country must begin to open new markets with its products. "We must look for penetration strategies", said.
Estrada, in addition, esteem that the uncertainty, previous to the Constituent Assembly, does not allow a greater level of investment, national as as much foreign.

Greater public cost
For the Corporation Training center and Ana'lisis (CCEA), of the Chamber of Commerce of Quito, the estimation of the growth of the Gross Internal Product for 2007 is superior to the one of the 2006, but this it fundamentally explains by the increase of the consumption and investment of the public sector that, of worrisome form, is displaced to his contrapartes prevailed.
Also, it indicates that the forecasts of the BCE indicate that for the 2007, the private consumption would decelerate in relation to 2006, and the exports would fall in a recesiva stage.
In addition, the public consumption would increase in a rate superior to the 7 percent in real terms, which surely, to its criterion, was one of the determinants of the rise of the inflation between April and June.

On the other hand, the total of societaria investment, national as as much foreign of the first trimester of 2007, has diminished with relation to the same period of year 2006. The main reason of that would be the increasing uncertainty of the companies.
Other factors of incidence
Public the oil production has been reduced of almost constant way in the last months, including the corresponding one to block 15, which next to the loss of price of petroleum, in relation to 2006, has implied the diminution of the oil exports (21% when comparing the period January-May of 2006 with the one of 2007).
The reduction of external sales is the main reason, according to the CCEA, for the accumulation of a commercial deficit of 71 million dollars, between January and May of 2007, since the traditional and nontraditional exports have grown in a 4 and 11 percent, respectively, whereas the imports increased in a 11 percent.

There is no expansive fiscal policy
The CCEA considers that during the first months of management, the present government as soon as it has initiated his expansive fiscal policy.
When reuniting the information of the Central Government and the oil bottoms (CEREPS, FACE, FEISEH), is that the cost has increased a 31 percent (USD 675 million) in the first five months of the present year, with relation to the same period in 2006.
Although the cost, that does not include the oil bottoms, grows in the mentioned period a 5 percent.

"the increase of the cost has not been of the magnitude that had loved the government, due to several bureaucratic processes that are necessary before the payment of resources. In spite of those restrictions, and of which every month important resources enter to the oil bottoms, the saving of such is diminishing (USD 109 million until May of the present year in relation to 2006)", indicates the CCEA.
Uncertain future
All this diagnosis does, to criterion of the CCEA, that the presented/displayed negative feedbacks previously, next to the political panorama that is approached, the impact of the economic policies executed and those that would be made next, as well as the omissions that imply not to apply bottom solutions to the serious problems of the national economy, make think that the horizon is not promissory.
"the time of the present government has been short, however, the uncertainty is what is primate", writes down.

ANALISIS
Greater competitiveness is required Bolivar Cevallos, president of the directory of Expoflores. It is necessary to watch the lack of economic growth from two sides. The first products in which always we are growing and in that Ecuador has a potential.
The nontraditional exports in general grew in the first trimester, and are, exactly, those that helped to close the pocket of the nongrowth of the oil exports.
The ideal would be that all the activities are in constant growth, for that is needed that Ecuador acquires first competitiveness.
It must improve the infrastructure subject. We must have good routes, airports, ports. We must also improve in the subject of services. We cannot have an electrical energy more face than our neighbors.
On the other hand, we must desburocratizar. To eliminate as much papeleo that it is needed to export or for any proceeding within the country.
The investors look for a tranquillity climate, that him of confidence for the investment.

PHRASES
"there are no clear rules of the economic handling. Therefore, the economy by the side of the investment is in delay compass."
Walter Spurrier, economic analyst.
"Ecuador is a country with a great potential of development."
Eduardo Aninat, ex- minister of Property of Chile.
"It is necessary to recover the weight of petroleum in the economy."
The Faustus Ortiz, minister of Economy and Finanzas.
Economy. Growth 3,4por one hundred would grow the economy in the 2007.

[Cobra_Strike]

I can't seem to drink enough to dull the news. Either it ends in sickness, or I still feel it. There is always something else to know.

[Alcassin]

I've got few questions about this subject:
1. Did Correa start nationalization effort?
2. When Equador peaked?

[steam_cannon]

2. When Equador peaked?

Probably 2004

Ecuador - 2003
Production now stands at about 400 kb/d, the capacity of the line. The depletion peak has been accordingly somewhat delayed by the limits to export, not being expected until 2004. Production is likely to have fallen to about 250 kb/d by 2020 and 80 kb/d by 2050.
From 2004 to 2005 production still increased by 1.1%, which indicates a near term peak. A new projection is made with a decline of 4% to a liquids production of 290 kb/d by 2020.
An assessment of world oil exports (info on many countries)
by Lu's de Sousa - 10 Nov 2006
http://www.energybulletin.net/22213.html

[rockdoc123]

It would be interesting to see how much of the decline is due to the industry having been more or less nationalized by the newest leader. There is still a fair bit of heavy oil that is currently stranded in the NW corner of the country bordering Peru's Maranon basin and Colombia's Putamayo basin. Much of this heavy oil has decent viscosity so it flows at reasonable rates. The big issue has been the long pipeline build that would be required to get this oil to market.