Ecuador Government Plans Increased Oil Drilling

According to Benito Cabrera, the sub-general of oil production of Petroecuador, as stated in an article in the newspaper El Universo, Ecuador will produce 58 million barrels of oil annually by next year, the current output is about 51 million barrels per year.

As well, this year they plan to drill 65 new wells, and for next year they plan to drill 95 new wells. The cost of production is $5 a barrel and it sells for $89-90 on the open market at today’s market prices. The sale of crude oil funds 30-40% of the Ecuador government’s budget annually.

What does this mean for property investors? I wouldn’t buy large tracts of land in the countries’ Amazon region, where most of the oil is found. Because if oil is found on your property, the government could nationalize it, they would pay you for your land but usually not as much as the market value.

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