Investment & Operational Criteria

Key Indicators

Risk Premia









Reserves (1P)


mm boe





The recent a referendum banning oil operations in the Yasuni national park, effectively calling time on the Ishpingo Tambococha Tiputini onshore field operated by Petroecuador. This is a mixed blessing, as the operations had progressively become a joke as lax governmental practices have left the operations below what would be expected by international oil companies. Nevertheless, nationalisation issues continue to dog the risk premia, which we increase by a further 0.50%; Outlook remains Negative.


August 23, 2023

Country Basics


Americas - South

Reserves (1P)


mm bbl





Western South America, bordering the Pacific Ocean at the Equator, between Colombia and Peru.


Tax Regime


Tax Regime

Under Ecuador’s current Participation Contract terms, the contractor is responsible for financing all operations. Production is shared between the State and the Contractor at a rate that is biddable item and usually varies with production levels. The contractor is liable to tax on its net profit. In 2006/2007 Ecuador introduced a Windfall Profits Tax, which currently takes 99% of revenue above a hurdle oil price (specified in each contract). The tax has been introduced as part of the government’s campaign to force participation contractors to replace their concessions with new service contracts.

Investment & 

The government of Ecuador under President Guillermo Lasso has adopted an ambitious economic reform agenda to drive investment. Following the April 2021 election of one of the region’s most pro-business presidents in decades, private sector leaders in Ecuador emphasized the “Lasso Effect” in investment, given the surge of optimism. “More Ecuador in the world and more of the world in Ecuador” – President Lasso’s key message for his presidency – includes the administration’s drive to attract $30bn in investment over his four-year administration. With investment facilitation becoming a central pillar of public policy, the Lasso administration launched the “Ecuador Open for Business” initiative in 2021 to promote investment, particularly through public-private partnerships ("PPPs"). In 2022, the initiative held investment forums in eight countries, including the United States. Foreign direct investment ("FDI") flows remain lacklustre as political instability threatens the investment outlook. Lasso’s opposition, which has a majority in the Ecuadorian National Assembly, frustrated the administration’s attempts to pass investment and other economic reforms. Violent protests in June 2022 resulted in an impeachment attempt against President Lasso and a loss of over $1bn for the economy. To end the protests, the Lasso administration made major concessions that complicated investment in the extractives industries, including a 12-month moratorium on additional oil and mining concessions. The National Assembly initiated new impeachment proceedings against President Lasso in March, kicking off a one-to-two-month legislative process to reach an impeachment vote. The impeachment proceedings resulted in Ecuador’s country risk climbing to nearly 2,000 points, constricting access to capital.

Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.

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