More investment needed

Faced with a mountain of foreign debt, Ecuador needs new private-sector investment if it is to keep raising oil production—a cornerstone of government revenues. But foreign firms are still wary of the unstable Andean nation, writes Robert Olson

GOVERNMENT officials are talking of a crisis in the oil sector, despite production surpassing 0.5m barrels a day (b/d) for the first time in the country's history, in January. State-owned PetroEcuador's production is falling, although the company—South America's third-largest oil firm—posted record profits of $1.3bn in 2003. With the completion of the new 450,000 b/d OCP heavy-oil pipeline, rising production from heavy-oil fields operated by privately owned companies has more than compensated for the declines at PetroEcuador. But, as the result of under-investment in the upstream sector by private oil producers, OCP throughputs are only around 200,000 b/d—far below the 390,000 b/d predicted