Petroecuador

National petroleum company of Ecuador

EP Petroecuador (Empresa Estatal Petróleos del Ecuador; Empresa Pública Petroecuador; meaning: State Petroleum Company of Ecuador) is the national oil company of Ecuador. Ecuador who is a member of the Organization of the Petroleum Exporting Countries (OPEC) and, although it is the smallest member, the country produced 531,000 barrels of crude oil per day in 2019. The oil corporation is a significant part of the Ecuadorian economy. The petroleum industry has expanded to the production of refined commodities such as gasoline, liquefied petroleum, and jet fuel. The government of Ecuador is highly dependent on the revenues from the energy sector to support its budget and finance state projects.

Petroecuador is a state owned enterprise, founded on September 26, 1989. In its conception, Petroecuador began as a fiscal agent; however, in time, it came to manage and operate most of the country's oil sector. It is the successor to Corporación Estatal Petrolera Ecuatoriana (CEPE) which was formed in 1972. In 1973 Ecuador granted Shell Oil drilling concessions. In 1964, Texaco was also invited. From 1977, Texaco became the majority owner (62.5%) until it transferred ownership back to the Ecuadorean state in 1992, maintaining a 37.5% ownership. The transfer of ownership was due to political policies within Ecuador limiting foreign ownership as well as the decision not to re new the contracts.

Petroecuador has allegedly contributed to human rights violations according to some critics. The violations are on the health basis concerning the local populations due to bad practice of Petroecuador as well as foreign industries established within Ecuador. On February 26, 1998 there was an explosion and fire at the Petroecuador pipeline in Esmeraldas, a port city in northwest Ecuador. In another incident, this one unrelated to oil exploitation, on January 17, 2002 a Fairchild FH 227E passenger plane (reg. HC AYM, sn. 511), belonging to the aviation unit of Petroproducción, flying from Quito's Mariscal Sucre Airport to Lago Agrio Airport (150 km. west of Quito), went off course and struck the 4500 meter high Cerro El Tigre mountain in Colombia's Putumayo Department. This happened 14 km. across from the border with Ecuador and approximately 50 miles (80 km.) from its destination. The 21 passengers (all Petroecuador employees) plus the five crew members were killed. The controlled flight into terrain was caused by a loss of situational awareness by the pilots, owing to distractions (lack of sterile cockpit rule) and poor crew resource management. All these factors were compounded by bad weather (fog) and the plane's lack of a ground proximity warning system.

Petroecuador has been the subject of controversy over the impact of exploration and pipeline operations on the environment and Huaorani and Cofan indigenous peoples within the Amazon basin in Ecuador's Oriente (eastern) region. In 1964 oil drilling operations began to take place in previously roadless rainforest carried out by Texaco. Advocacy groups such as Amazon Watch and ChevronToxico have attempted to document the oil spills, ecological damage and human impacts of these operations. Prof. Judith Kimerling of CUNY School of Law in 1991 published a book Amazon Crude which details many of these problems. Petroecuador has been the sole owner and operator of the oil facilities since 1990. In 2000–2008, the company was responsible for 1,415 oil spills. Petroecuador has also failed to clean up sites that were its responsibility under the joint venture.

Between the years 1964 and 1992 the Texaco Corporation and years later Petroecuador carried on intensive oil operations in the northeastern region of the Ecuadorian Amazon. These operations affected indigenous and non indigenous local livelihoods in the area by impairing the ecological functions and biodiversity of thousands of acres of land. Today the effects of these operations have been investigated and through the dumping crude in open pits, burying oil extraction byproducts, and burning unwanted oil without proper treatment, cancer rates amongst indigenous and non indigenous residence has increased dramatically with in a ten year time period. As oil weathers, contamination occurs as aromatic compounds are released and invade surrounding aquifers.