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Ecuador Enters Recession as China Loans Fail to Offset Oil

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 […]

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Ecuador’s Oil Export Revenue Falls 44% in January

QUITO—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 […]

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

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 […]

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Ecuador to Top 2014 Oil Output Target, Official Says

QUITO–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 […]

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

Tune in Tuesday at 9 p.m. ET/ 6 PT to watch America Tonight’s report on drilling for oil in the Amazon. ORELLANA PROVINCE, 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 […]

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Eni makes major oil find in Ecuador

MILAN, Italy, Sept. 18 (UPI) — 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 […]

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

QUITO—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 […]

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

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 […]

Posted On : Published By : Tom Whipple