How Significant Is Ecuador’s Decision to Leave OPEC?
Ecuador will leave the Organization of the Petroleum Exporting Countries, or OPEC, in January in a bid to increase its revenue from crude oil sales, the Energy Ministry announced this month. How significant is Ecuador’s departure from OPEC, and what sorts of implications could it have on the global oil market? How will leaving OPEC benefit the Andean nation, and what does it stand to lose? Will boosting oil production significantly alleviate Ecuador’s financial troubles?
Jorge León, member of the Energy Advisor board and energy economist at BP: “As a former Ecuadorean OPEC officer, I believe that the decision to leave the organization is not correct. The Ecuadorean government argued that this measure is in line with its plan to reduce public spending and generate new income through increased oil production, and that its OPEC membership was constraining this. In reality, Ecuadorean production has been fairly constant in the last few years, and there is very little hope that Ecuador can increase production in the near term. Despite the new investment that the country has attracted in the last couple of years, oil fields are quite mature now, and decline rates are accelerating. In fact, the International Energy Agency forecasts that Ecuadorean capacity will fail to increase in the next five years. I also believe that leaving such an important organization is detrimental for the international position of Ecuador. OPEC is a group of very influential countries around the world, and this is particularly important now, when the role of oil in the global energy transition is questioned. Moreover, OPEC and its member countries have very well-established dialogues with…”Read More
Brazil’s Senate Paves Way for Nov. Oil Rights Auction
Petroperú Seeking $1.5 Bn in Gov’t Funds for Refinery
Complete editions of the Energy Advisor are delivered weekly to members of the Dialogue's Corporate Program and other subscribers. Sign up below for a free complimentary preview subscription.
About the Energy Advisor
A sister publication of the Inter-American Dialogue’s daily Latin America Advisor, the weekly Energy Advisor captures fresh analysis from business leaders and government officials on the most important developments in oil and gas, biofuels, the power sector, renewable energies, new technologies, and the policy debates shaping the future of energy in the Western Hemisphere. To subscribe or for more information, contact Erik Brand, publisher of the Advisor, at firstname.lastname@example.org.