Oil Industry In Ecuador

CATHOLIC UNIVERSITY OF SANTIAGO DE GUAYAQUIL

INTERNATIONAL BUSINESS MANAGEMENT

OIL INDUSTRY IN ECUADOR

STUDENTS:

Renato Samaniego

Andrea Camacho

Viviana Landeta

Wendy Herrera

Fabián Plaza

Carola Coellar

Date

May 26, 2010

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1. Oil Industry: World Facts…………………………………………………………………….Pag 3

2. World Oil Production Forecast(Graphics)……………………………………….Pag 4-7

3. Oil Production Countries Rating…………………………………………………………..Pag 8

4. Barrel of Oil…….………………………………………………….………………………………..Pag 9

5. OPEC……………………………………………………………………………………………………Pag 10

6. Oil Industry in Ecuador …………………………………………………………………….Pag 11

6.1 Background……………………………………….……………………………………….Pag 11-12

6.2 Oil……………………………………….…………………………………………………………….Pag 136.3 Graphic (Oil Producers)……………………………………………………………………Pag 14

6.4 Oil Production in Ecuador…………………………………………………………………Pag 15

6.5 Oil Production Bar Chart………………………………………………………………….Pag 16

6.4 Sector Organization…..……………………………………………………………………Pag 17

6.5 Exportation and Production……………………………………………………….Pag 17-18

7. Pipelines……………………………………………………………………………………………..Pag 19

7.1 DownstreamActivities………..……………………………………….…………….Pag 19-20

7.2 Main Importers of Ecuadorian’s Oil…………………………………………………Pag 21

7.3 Principal Ecuadorian Oil Partners…………………………………………………….Pag 22

8. Natural Gas Profile…………………………………………………………………………….Pag 23

9. Ecuador Energy Profile…………………………………………………………………Pag 23-29

10. Conclusion………………………………………………………………………………………..Pag 30

11.Biography.............................................................................Pag 31

1. OIL INDUSTRY: WORLD FACTS

Economics/Politics:

The oil industry is easily influenced by economic and political conditions. If a country is in a recession, fewer products are being manufactured, not as many people drive to work, take vacations, etc. All of these variables factor into less energy use.

Supply and Demand:Oil and gas prices fluctuate on a minute by minute basis, taking a look at the historical price range is the first place you should look. Many factors determine the price of oil, but it really all comes down to supply and demand. Demand typically does not fluctuate too much (except in the case of recession), but supply shocks can occur for a number of reasons. When OPEC meets to determine oilsupply for the coming months, the price of oil can fluctuate wildly.

Rig Utilization Rates:

Another factor that determines supply is the rig utilization rates; its close relationship to oil prices is not a coincidence. Higher utilization rates mean more revenue and profits.

Contracts:

The contracts through which an oil services company is paid also play a large role in supply. Pay closeattention to the dayrates, as falling dayrates can dramatically decrease revenues. The opposite is true should dayrates rise.

Financial Statements:

After these wide scale factors have been considered, it's time to get down to the nitty gritty - the financials. And when it comes to the financials, the same old rules apply to oil services companies. Ideally, revenues and profits will be growingconsistently, just as they do in any quality company. It's worth digging deeper to see if there are any one-time events that have dramatically increased revenues. Also, the P/E ratio and PEG ratios should be comparable to others within the industry.

2. World Oil Production Forecast - Update November 2009:

World oil production peaked in July 2008 at 74.74 million barrels/day (mbd) and nowhas fallen to about 72 mbd. It is expected that oil production will decline at about 2.2 mbd per year as shown below in the chart.

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Fig 1 World Oil Production to 2012 (oil includes crude oil, lease condensate and oil sands)

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Fig 2 - World Oil Production to 2100
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Fig 3 - Non OPEC Oil Production to 2012

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Fig 4 - World Supply, Demand and Price to 2012
3. OIL...