In recent years, an increasingly important percentage of Ecuador's national income has come from the petroleum industry. Initially, this industry was slow in developing, and production actually declined from 2,849,000 barrels of crude oil in 1965 to a low of 1,354,000 barrels in 1971. Starting in the 1970s, however, output increased dramatically, from 28,579,000 barrels in 1972 to 77,052,000 barrels in 1981, and to 109,400,000 barrels in 1991. After Ecuador withdrew from the Organization of the Petroleum Exporting Countries (OPEC) in 1992, the country's daily crude oil production rose from 321,000 barrels in 1992 to nearly 400,000 barrels by the end of 1995. Production in 2000 was 395,000 barrels per day. In the same year, petroleum exports accounted for 44% of total exports. Net oil exports in 2000 were 276,000 barrels per day. In the early 1970s, most of the oil industry was managed by foreign companies, which were granted concessions by the government; since 1996, Petroecuador, the state oil agency, has controlled all production, exploration, and marketing.
Most oil comes from the Oriente Province (the Amazon jungle region); Ecuador's proven oil reserves were estimated at 2.1 billion barrels at the end of 2001. At the rate of current extraction, known reserves will be depleted by around 2010. A 1969 agreement between the government and a Texaco-Gulf oil company consortium provided for the construction of the 480-km (300-mi) Trans-Ecuadorian pipeline (SOTE) with a capacity of 250,000 barrels a day in the early 1970s. The pipeline, which carries petroleum across the Andes to the tanker-loading port of Esmeraldas, was partially destroyed in the March 1987 earthquake and was unusable for five months. Following several expansions, the capacity of the pipeline had reached 390,000 barrels per day by 2000 but was still limiting the amount of oil Ecuador could produce. Construction of a new $1.1 billion heavy oil pipeline with a capacity of 450,000 barrels per day began in June 2001 by a five-member consortium, with completion slated for late 2003. Production of natural gas is relatively small, totaling 105 billion cu m (3.7 trillion cu ft) in 1999.
Installed capacity rose from 93,000 kW in 1958 to 357,000 kW in 1972 and 3,499,000 kW in 2000. Total production of electric power in 2000 amounted to 10.3 billion kWh, 75% of it hydroelectric and 25% from fossil fuels. In the same year, consumption of electricity was 9.7 billion kWh. About a quarter of the population still is without electricity, and current production is insufficient to keep up with growing demand. In 1995, a serious drought affected hydroelectric generating capacity, and daily blackouts became common. When drought struck again in 2001, the government declared an energy emergency, urging the public to conserve energy. About half the country's electricity supply comes from a single hydroelectric plant at Paute. In 2001 the World Bank approved a loan of $23 million to help Ecuador expand and modernize its power sector.