Ecuador’s Oil Industry Desperately Needs A Miracle
Over the last decade it has been a wild ride for Ecuador’s trouble-plagued but economically crucial oil industry. Former president Rafael Correa’s heavy-handed policies, centered around oil nationalism and greater state control of the industry, deterred foreign energy majors from investing in the impoverished Latin American nation. Those impacted the profitability of private energy companies and allegedly led to profiteering by state run energy enterprises and far-reaching corruption.
Since assuming office in 2017 President Lenin Moreno embarked upon on a strategy of reforming and reviving Ecuador’s deeply troubled petroleum industry. The problems are so severe that Ecuador’s refineries are incapable of processing sufficient fuel to meet local demand. Moreno believes those changes will attract the urgently required investment needed to renovate aging and dilapidated energy infrastructure as well as expand Ecuador’s proved oil reserves and production. Among the most important reforms are Quito’s decision to exit the OPEC oil cartel, in January 2020, and the push to privatize much of Ecuador’s energy assets.
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