Ecuador Market Research

The Ecuador market research shows that the country will account for 2.47% of the Latin American regional oil demand by the end of the forecast period in 2014. It will be providing 3.94% of the total production at the same time.... view more

Ecuador Market Research

The Ecuador market research shows that the country will account for 2.47% of the Latin American regional oil demand by the end of the forecast period in 2014. It will be providing 3.94% of the total production at the same time. The Latin American use of oil was 6.93mn b/d in 2001 which reached 7.78mn b/d in 2009. By the end of 2010, it should rise to around 7.92mn b/d and by the end of the forecast period of 2010-2014; it should rise to 8.63mn b/d. The regional oil production was 10.3mn b/d in 2001 which fell to 9.69mn b/d in 2009. It is set to rise to 10.79mn b/d by 2014. The oil exports in the Latin American region are slipping down owing to the increasing demand against the lessening supply. The export limit in the region is expected to pick up marginally by 2014 and the principal exporters will be Mexico, Venezuela, Ecuador and Brazil. On the natural gas front, the demand for the same was 200.6bcm in 2009, which is estimated to rise to 263.9bcm by the end of 2014 depicting a growth rate of 31.6%. The production level was 216.8bcm in 2009 which is expected to rise to 293.0bcm at the end of 2014 and this would be able to provide net exports of 29.1bcm. The contribution of Ecuador will remain insignificant in relation to the production, as well as, the consumption.

The country’s real GDP increased by 6.5% in 2008 after which there has been no change at all. However, in the forecast period of 2010-2014, an increase in the real GDP is estimated at the rate of 1.2%. PetroEcuador, which is state-owned, is in collaboration with several international oil companies and there has been a successful delivery of a greater volume of crude oil between them in the past few years. By the end of 2014, the estimate for oil and gas liquids is kept at 425,000b/d while the country managed to pump 475,000b/d in 2010. After 2009-10, the consumption is estimated to grow at a rate of 3% every year. In a larger period of estimation, the oil production of Ecuador would decrease by 16.2%. The position of Ecuador in BMI’s updated upstream Business ratings is eighth, which is below Bolivia as well. This is because the oil production is not high and when coupled with high country risk, this proves to be a deterrent for most foreign investors. There is also low privatization in the country with state involvement in almost every sector which makes the market unattractive for most potential investors. Ecuador is ranked seventh ahead of Venezuela and Chile in the downstream ratings, which is a reflection of the high country risk, concerns over regulatory practices, and a less than stellar outlook towards growth. The country is three points short of Peru and Mexico and just two points ahead of Venezuela and Chile, leaving it prone to attack in the next few quarters.