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Oil & Mining

Petroleum production and export is the Ecuadorian economy's single largest source of revenue, generating an estimated 36% of all export earnings, accounting for over 50% of the public sector's income, and 12% of the country's gross domestic product.

On average, Ecuador produces 236,000 barrels per day, exporting 85 million barrels of crude and 13.7 million barrels of refined products annually. Oil earned the country USD 1.5 billion in 1999.

The petroleum sector is managed by the state-owned company Petroecuador and its affiliated entities which control the exploitation of oil reserves, mainly in the Amazon basin, to private oil firms, including Ocidental, Oryz, YPF, etc.

The transportation of crude oil from the Amazon region relies on the Trans-Ecuadorian Oil Pipeline that extends to the oil terminal at the port of Esmeraldas . The old pipeline is insufficient to cover the current needs of the companies, due its capacity limit. The construction of a new pipeline system was put in the hands of a foreign company in February 2001.

Ecuador 's oil fields are located in an area of tremendous ecological importance and fragility, and are therefore monitored closely by local and international environmental organizations. Although there are environmental considerations required by the government in its licensing process, there is a complete lack of environmental control over the companies that operate in the Amazon rain forest. This leads to more oil spills than the government or the companies admit to.

Several environmental organizations have denounced the contamination of water resources that the indigenous communities use in their every day activities. Currently, there is an important law suit being carried out in the U.S. by the Cofan Indians against the company Texaco, which operated several oil fields since the 1970's. The Cofan community, who lives in an area of the Amazon region, charged Texaco with the destruction of land and water resources essential to the Cofan's way of live. Texaco is no longer operating in Ecuador .

Ecuador has extensive, but underdeveloped, gold and other mining potential. Mining is done in a rudimentary way, with small communities dedicated to the extraction and sale of the materials directly or through cooperatives. Foreign mining companies have tried to establish themselves in the country, but the unclear legislation regarding mining practices has prevented any significant foreign investment.