MercoPress. South Atlantic News Agency

Ecuador's oil industry 3 billion US dollars short

Petroecuador, Ecuador's government owned oil company needs 3 billion US dollars in investment if the Andean country is to reach overall average daily production of 670,000 barrels (bpd) by 2010 according to oil expert Ramon Espinasa.

This was the most important conclusion of a joint report by the Inter-American Development Bank (IDB) and the Andean Development Corporation (CAF).

According to the Venezuelan expert, Petroecuador pumps less than 200,000 bpd of Ecuador's total output of some 500,000 bpd.

Lack of investment in Petroecuador has caused oil production to slip by one-third from its level of 330,000 bpd a decade ago.

Mr. Espinasa blamed the lack of investment to the inability of Ecuador's public sector to save.

However, despite lower production total revenues from oil exports have increased over the past 10 years as a result of investment by private oil companies.

"Ecuador's current total production is 30% above 1990 levels and continues to increase, but what has changed is its composition, since private production is higher" indicated Mr. Espinasa.

Petroecuador operates oil fields in Sacha, Shushufindi, Libertad, Lago Agrio and Auca that yield total production of less than 200,000 bpd.

Increasing state oil production to 270,000 bpd would require 1.3 billion US dollars and expanding private oil output by 100,000 bpd, 1.7 billion US dollars.

Ecuador's oil export revenues, valued at some 2.5 billion US dollars a year, finance close to 40% of the national budget.