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Energy
It is necessary to deposit the oil even in the Galapagos Islands
Santa Elena Refinery
Thanks to renegotiation, any increase in international oil
prices will mean a 100% profit for the State. For every
dollar per barrel increase in international oil prices, the
state will earn $245 million USD more. All specialized
international institutions like the International Energy
Agency, the Department of Energy of the United States,
the Cambridge Energy Research Associates and the
Organization of Petroleum Exporting Countries predict
that oil prices will increase in the future reaching levels
between $ 100 $/ bbl and 160 $/ bbl in 2020.
With current business contracts, companies receive
20% of oil revenues and the State 80%, whereas previ-
ously it was a 30/70 split. If the international oil prices
decline in a given year, the State will always receive the
first Sovereignty Margin of 25%.
The contractors are obliged to reduce production costs
to improve profits. Relatively constant tariff rates during
the duration of the contract force the improvement of
profits in order to reduce costs. This reduction will ben-
efit the country because in doing so they will pay more
in income and participation taxes for workers.
These 3 dynamic factors: rising prices, reducing costs
and increasing production converge in greater State
participation in oil revenues and therefore in higher ben-
efits for the country.
Opening of new oilfields: Panacocha
Ecuador has many investment opportunities for inter-
national companies. For example, in 2010 Ecuador
opened Pañacocha oilfield, located in the Amazonian
province of Sucumbios, on the Colombian border,
which will generate $ 750 million USD annually. With
a yield of 125%, in 6 months the Pañacocha field will
recover the $ 292 million USD that was invested in its
construction, which took 31 months.
Improvement in the Esmeraldas Refinery
The Esmeraldas refinery is pivotal in Ecuador’s hydro-
carbon sector. It has been well maintained and updated
with an approximate investment of $700 million.
One of the most important aspects of this improvement
was carried out by the Korean company SK which was
contracted in 2008 to perform some enhancement
tasks in Phase 1 as well as construction a new reactor
in the refinery.
Pacific Refinery
The Pacific Industrial Complex is also a very important
facility as it combines a high conversion facility (refining
at least 300,000 barrels per day) and a fertilizer plant (of
20,000 barrels per day). This type of set up is crucial
to Ecuador gaining self sufficiency in the energy sector.
The Pacific refinery is located in the province of Manabi
and will have the capacity to refine 300,000 barrels of oil
to produce gasoline, fuels, lubricants, light gases, LPG,
naphtha, kerosene, diesel, asphalt, minerals, fertilizers,
among others. The project is a major investment with
its astronomical costs of $12,560 million. However,
considering that Ecuador imports about $3,000 million
worth of products per annum, with this new refinery we
have the possibility of exporting products. Construction
began in 2010 and operations are scheduled for 2013.
This refinery will be the largest of the Pacific coast and
is a great contribution to the development of the area.
YASUNI ITT PROJECT
In 2007, the Ecuadorian government unveiled an ambi-
INVESTMENTS
The oil field has reserves of 42.1 million barrels of oil,
with the estimated production of 24 thousand barrels
per day for the next 20 years.