- Petroleum liquids and renewable energy, specifically hydroelectric energy, account for most of Ecuador’s energy use (Table 1). Ecuador’s energy production increased by a compounded growth rate of 0.5% per year from 2011 to 2021, and renewables accounted for most of the increase. The country’s energy consumption also increased by a compounded growth rate of 0.5% per year over the same period, down from 4.9% per year the decade prior.
- Petroleum and other liquids continue to be Ecuador’s primary source of energy; crude oil accounted for 63.4% of total energy consumption in 2021. The country has significant oil reserves and is one of South America’s top oil producers. Ecuador’s global share of petroleum and other liquids produced in 2021 was 0.6%, ranking fifth among oil producers in South America.
- Ecuador’s natural gas market is less developed than its oil sector; it has a 0.9% share of total energy production and 1.7% share of energy consumption (Figure 1). Natural gas in Ecuador is mostly used by the industry sector1.
- Hydropower in Ecuador is a significant source of electricity generation given the country’s geographical features, such as the Andes Mountains and the Amazon rainforest. Hydropower accounted for 79.1% of total electricity generation in 2021, up from 55.4% in 2011.2
Petroleum and other liquids
- Ecuador held 0.5% of the global share of oil reserves in 2022, making it the fourth highest in Latin America and the Caribbean, with approximately 8.27 billion barrels.3 In 2022, the country produced approximately 482,000 barrels per day (b/d) of petroleum and other liquids (Figure 3). Most of Ecuador’s oil is sourced from the Amazon region, specifically the Oriente Basin. Ecuador’s production of petroleum and other liquids peaked in 2014 at about 562,000 b/d. Ecuador’s oil industry has struggled to maintain production because of aging fields, pipeline disruptions, and environmental concerns.
- Petroecuador, the largest state-owned enterprise (SOE) in Ecuador, oversees the country’s oil exploration, production, refining, and marketing. Petroecuador is the country’s top oil producer, accounting for an estimated 80% of Ecuador’s output via its subsidiary Petroamazonas. Petroecuador controls the country’s crude oil processing capacity through Petroindustrial, its refining subsidiary. The government controls the distributor margins for fuels sold to various domestic and international retailers. Petroecuador invested US $1.9 billion in 2022, a 17% increase over the previous year. This investment included completing 117 wells compared with 64 wells completed in 2021.4
- Ecuador’s main crude oil pipelines are the Trans Ecuadorian Pipeline (SOTE) and the Heavy Crude Oil Pipeline (OCP). SOTE is operated by the state oil company Petroecuador, and OCP is operated by a private consortium. Both pipelines connect Ecuador’s Amazon producing region to refineries and export terminals on the Pacific coast. The 360,000 b/d SOTE pipeline carried an average of 320,000 b/d of medium export grades (24-degree API and 1.59% sulfur content), primarily Oriente, in 2022. It links the Amazon oil fields to the Balao Maritime Oil Terminal and the Esmeraldas refinery. The OCP pipeline, which is more than 300 miles long, transports the heavier Napo export grade (19-degree API and 1.96% sulfur content).5 The pipeline has a capacity of 450,000 b/d but transported an average of 150,0000 b/d in 2022. The line connects Lago Agrio’s Amazonas Terminal to the Esmeraldas OCP Marine Terminal.6
- Ecuador’s government has maintained its efforts to strengthen the country's hydrocarbon industry. Ecuador’s president, Guillermo Lasso, signed an executive decree in July 2021 to privatize the country's oil industry through a series of reforms aimed at selling state-run fields to the private sector. This effort includes selling oil fields to private companies through public tender rounds and continuing to improve Petroecuador's operations.7
- In recent years, Ecuador’s oil industry has faced numerous challenges. Pipeline disruptions have increased in recent years as a result of accelerated erosion after a nearby waterfall partially collapsed. Both pipelines have also been affected by natural disasters and protests. Landslides ruptured both the SOTE and OCP pipelines in April 2020, resulting in one of Ecuador’s worst oil spills. In January 2022, the OCP pipeline was ruptured by falling rocks, resulting in another spill. The spill contaminated over five acres of the Cayambe-Coca National Park. In June 2022, Petroecuador declared force majeure as protestors stormed oil fields, demanding reduced fuel prices and economic reforms.8 A landslide in the Amazonian province of Napo caused the Marker River Bridge to collapse in late February 2023. Both of Ecuador’s pipelines were shut down for safety reasons, even though neither had ruptured. As a result, Petroecuador was forced to close wells and declare force majeure, and total crude oil production fell by 17.8% (approximately 2,700 thousand barrels) from January to February 2023. The restriction was later lifted in early March 2023.9
| Refinery | Operator | Crude oil distillation capacity (thousand barrels per day) | Location | |
|---|---|---|---|---|
| Refinería Estatal de Esmeraldas | Petroecuador | 110 | Esmeraldas | |
| Refinería La Libertad | Petroecuador | 45 | Santa Elena | |
| Refinería Shushufindi | Petroecuador | 20 | Sucumbíos | |
| Total | 175 | |||
| Data source: Oil & Gas Journal, 2022 Worldwide Refining Survey | ||||
Natural Gas and LNG
- Ecuador’s natural gas reserves are associated with its oil fields. Ecuador had 385 billion cubic feet (Bcf) of proven natural gas reserves as of 2022. Ecuador’s natural gas reserves account for about 0.14% of South America’s total reserves. Ecuador’s natural gas production is small compared with oil production, accounting for less than 1% of total energy production in the country in 2021. Natural gas production in Ecuador has historically received very little investment. As a result, Ecuador lacks the infrastructure for capturing and marketing natural gas, which has limited natural gas production.
- All of the natural gas produced in Ecuador is consumed domestically. The country’s dry natural gas consumption per capita is the fourth lowest in South America. Ecuador’s natural gas is primarily used by industry for power generation and industrial processes.10
- Petroamazonas, a Petroecuador subsidiary, operates the Amistad conventional natural gas field, located in shallow water in Ecuador. The field is in Block 6, with a water depth of 203 feet. The Amistad conventional natural gas field recovered 70% of its total recoverable reserves after production peaked in 2014 at 20.4 Bcf.11 Petroecuador last drilled development wells at the field from October 2012 to April 2015 with Diamond Offshore’s jackup rig called Ocean Spur, which has since been scrapped. Since then, natural gas production declined by 48% through 2021. Natural gas production is estimated to have averaged 18 Bcf in 2022, compared with 11 Bcf in 2021. Nearly all of the production came from the Amistad offshore field; the rest of the natural gas was associated with oil production.12
- The government fixes a set price for natural gas in Ecuador. The country has one of the largest subsidies on liquefied petroleum gas (LPG), making LPG price in Ecuador that are significantly lower than international benchmarks.13
Coal
- Coal does not play a significant role in Ecuador’s energy market. The country’s 26 million short tons of coal reserves are in the Cañar-Azuay Basin,14 but Ecuador does not produce coal. In 2021, the country consumed 21 thousand short tons,15 which it imported primarily from the United States, followed by Peru.
Electricity
- Ecuador relied heavily on fossil fuel (which include oil, natural gas, and coal) production for power generation a decade ago, with fossil fuel-powered plants accounting for about 43% of total energy production in 2011. The country now generates electricity from a variety of sources, including hydropower, thermal power plants fueled by natural gas and oil, and renewable energy sources, such as wind and solar. In 2021, hydropower was the primary source, accounting for 79% of the country’s electricity generation. The remaining electricity was generated from oil-powered conventional thermal power plants (17%), natural gas (4%), and other renewables (2%). As of 2020, industry accounted for almost 40% of total electricity consumption, followed by the residential sector (32%) and the commercial and public services sector (26%).16
- Ecuador’s mountainous terrain and numerous rivers allow for hydroelectric power generation. The launch of several large facilities since 1983 has solidified the hydropower sector's leading role in Ecuador’s electricity generation mix (Table 3). The Coca Codo Sinclair Hydroelectric Plant, located on the Coca River in Napo Province, is Ecuador’s largest hydroelectric facility, with a capacity of 1,500 megawatts (MW). The plant went into full operation in 2016 and is critical to meeting the country’s electricity demand. Since its commissioning, the plant has been undergoing repairs, and it has run into operational complications because of the erosion from the Coca River.17
- Ecuador’s reliance on hydropower for electricity generation makes the country’s power sector vulnerable to droughts and low water levels during the dry season, which generally runs from October to March each year. To compensate, Ecuador currently relies on oil-fired plants for non-hydroelectric power generation. The government is committed towards converting old oil-fired plants into natural gas-fired facilities to meet demand and to reduce costs and emissions. Although natural gas-fired generation has the potential to become a stable complement to drought- and erosion-prone hydropower, Ecuador's lack of domestic natural gas supplies prevents its expansion in the short term.
- Ecuador’s government opened the country’s largest wind farm in 2023 with a US $90 million investment. The Huascachaca Wind Farm is the country’s largest plant of its kind. The wind farm is located in the province of Loja and consists of 14 wind turbines of 3.57 MW each, supplying 130 gigawatthours (GWh) of energy per year via the 138-kilovolt (kV) Cuenca-Loja line.18
