Ecuador: Economy and Energy Overview

By Ruth Fernandez

International Management

Agenda

• Introduction

• Brief History

• Economy

• Petroleum

• Energy

• Environmental Considerations

2

Introduction

3 Source: CIA The World Factbook

República del Ecuador (Republic of Ecuador)

Capital City: Quito

Largest City: Guayaquil

Official Language: Spanish (some indigenous languages such as Quichua and Shuar are also spoken)

Population: ~16 Million (2015 estimate)

Ethnic Groups: 71.9% Mestizo, 7.4% Montubio, 7.2% Afroecuadorian, 7% Amerindian, 6.1% White, 0.4% others

Religion: Roman Catholic 74%, Evangelical 10.4%, Jehovah's Witness 1.2%, other 6.4%, atheist 7.9%, agnostic 0.1%

Gobernment: Unitary presidential constitutional republic

President: Rafael Correa

Legislature: National Assembly

Currency: US dollar

4 Source: CIA The World Factbook

Brief History

Pre – Incan Civilizations such as Valdivia, Machalilla, Cañari and Quitus Cultures (Before 1400)

Inca Ruling for short time in the late 1400

Spanish Conquest (dead of last Inca leader Atahualpa in 1533)

Colonial Era – Belonging to Viceroyalty of Peru

and Viveroyalty of Granada

(300 years)

5 Source: CIA The World Factbook

Brief History

Independence from Spain (1822)

Part of “La Gran Colombia” until 1830

(Venezuela, Colombia and Ecuador)

Separation from “La Gran Colombia” and struggle to define borders until 1999

Military government from 1972 to 1979

Democracy until today

6 Source: CIA The World Factbook

Economy

Ecuador is substantially dependent on its petroleum resources, which have accounted for more than half of the country's export earnings and approximately 25% of public sector revenues in recent years.

7 Source: CIA The World Factbook and Hausmann and Hidalgo

Annual Ecuadorian Crude Oil Exports (2013)

Economy

In 1999/2000, Ecuador's economy suffered from a banking crisis, with GDP contracting by 5.3% and poverty increasing significantly. In March 2000, the Congress approved a series of structural reforms that also provided for the adoption of the US dollar as legal tender.

8 Source: CIA The World Factbook and View Edition Artwork

• Dollarization stabilized the economy, and positive growth returned in the years that followed, helped by high oil prices, remittances, and increased non-traditional exports.

Economy

9 Source: IMF

Economy

Low oil prices has caused a crash in the Economy of Ecuador that is highly dependent on crude oil exports

High risk on investment due to political instability and recent natural disaster threats (increasing volcanic activity)

10 Source: IMF

Petroleum Ecuador is the smallest oil producing

member of OPEC and highly dependent on its petroleum production

11

Ecuador Total Primary Energy Consumption (2013)

Source: Ministerio de Hidrocarburos

Petroleum

The government increased exploration budget in 2014 before oil prices dropped

Private investment has not increased due to political uncertainty

12 Source: Ministerio de Hidrocarburos

Petroleum 8,832 Billion bbl Proven Oil

Reserves as of 2015

13 Source: CIA The World Factbook

Natural Gas

6,003 Billion cu m Proven Natural Gas Reserves as of 2014

14 Source: CIA The World Factbook

Energy Demand

15

Energy Demand by Sector (GWh)

Source: Ministerio de Electricidad y Energia Renovable

Electric Power Generation Capacity

Effective Power per Type of Energy (MW) 45.76% Renewable

54.24% Non-Renewable

16 Source: Ministerio de Electricidad y Energia Renovable

Energy Production

17 Source: Ministerio de Electricidad y Energia Renovable

Energy Production by Type (GWh)

Energy Imports

18

Imported Energy GWh

Source: Ministerio de Electricidad y Energia Renovable

Energy Price

19

Price of Energy by Sector (USD ₵/kWh)

Source: Ministerio de Electricidad y Energia Renovable

Energy Price

20 Source: Ministerio de Electricidad y Energia Renovable

Mean Price Colombia (USD ₵/kWh)

Future Expansion New planned hydroelectric

power plant projects

21 Source: Ecuador - International - Analysis - U.S. Energy Information Administration (EIA)

Coca Codo Sinclair Project - Sinohydro

Environmental Considerations

Increase level of efficiency in hydrocarbon consumption

Reduce social and environmental impact on activities related to hydrocarbon production

Optimization of electricity generation and energy efficiency

Increase modernization of processes and technological R&D

22 Source: CIA The World Factbook

References "Ecuador Coca Codo-Sinclair (CCS) HPP - Hydropower - Sinohydro". Eng.sinohydro.com. N.p., 2016. Web. 29 Mar. 2016.

"Ecuador - International - Analysis - U.S. Energy Information Administration (EIA)". Eia.gov. N.p., 2016. Web. 28 Mar. 2016.

Hausmann, Ricardo, and Cesar A Hidalgo. The Atlas Of Economic Complexity. Print.

International Monetary Fund,. Ecuador: Selected Issues. Washington DC: International Monetary Fund, 2015. Web. 28 Mar. 2016. Country Reports No 15/290.

International Monetary Fund,. Ecuador: Staff Report For The 2015 Article IV Consultation. Washington DC: International Monetary Fund, 2015. Web. 28 Mar. 2016. IMF Country Report No 15/289.

Ministerio de Hidrocarburos,. Rendicion De Cuentas 2015. Quito, Ecuador: Ministerio de Hidrocarburos, 2016. Web. 28 Mar. 2016. Informe De Gestion 2015.

Ministerio de Electricidad y Energia Renovable,. Estadistica Del Sector Electrico Ecuatoriano 2014. Quito, Ecuador: Ediciones Continente, 2015. Web. 28 Mar. 2016.

"The World Factbook". Cia.gov. N.p., 2016. Web. 28 Mar. 2016.

"View Edition Artwork". Stevengagnon.com. N.p., 2016. Web. 28 Mar. 2016.

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