Dark clouds hanging over Ecuadoran president's reelection hopes

Ecuador's President Daniel Noboa faces a long list of problems that will complicate his chances of reelection next February.

In addition to surging drug-related crime across the country and constant political friction in the national assembly, oil production has dropped significantly, heavy rains have destroyed roads in central, southern and Amazonian Ecuador, and there are fears that the next dry season could lead to more electricity rationing and power blackouts.

Moreover, the public will be hit by gasoline price hikes that came into effect on June 28. The hikes could create conflict for Noboa in the coming months as the government has started applying a system that means prices will rise by a maximum of 5% per month to reduce spending on subsidies.

National oil output has been undermined by various factors, including the blackout that affected the country on June 19, as well as the stoppage of operations of the privately-owned OCP crude oil pipeline, thefts of cables, structural problems and instability in the management of state-owned firm Petroecuador.

The OCP halted operations on June 17 due to problems caused by the erosion of the Coca river, not far from the country's main hydroelectric power plant, the Coca-Codo-Sinclair facility.

Two pipeline workers died last month due to a landslide caused by the erosion, which is advancing rapidly, according to technical reports.

The OCP transports 40% of Ecuador's oil, so Petroecuador declared force majeure on June 20 to avoid penalties from buyers.

Petroecuador was forced to shut down 55 wells in oil block 43, known as ITT, cutting its production by half to 25,000b/d because of the pipeline problems. The OCP stoppage has also affected fields in block 31 and the Edén Yuturi field in block 12, according to reports from Petroecuador.

Last weekend, armed men entered oil block 61 in Orellana province, overpowering workers and stealing cables. Petroecuador has also reported thefts of cables and equipment in oil blocks 56, 49 and 61 this month.

Energy and non-renewable resources regulator Arcernnr said at the end of June that Ecuador's oil output is currently around 395,000b/d, down from 485,000b/d in mid-June and the 475,000b/d average in 2023.

ELECTRICITY CRISIS

In the electricity sector, although the CEO of state-owned power company Celec, Fabián Calero, recently presented an emergency program to address the problems likely to be caused during the upcoming dry season, most people are expecting more blackouts.

According to electricity consultant Hugo Arcos, there is a national power generation deficit of around 1,000MW and if there are problems with hydro plants, there is a lack of thermoelectric capacity to cover the gaps.

"The only solution to get out of the electricity crisis is the urgent installation of thermal plants. If we take into account that the dry season begins in October, there are only two months left to install the plants, so it’s highly likely that there will be new blackouts," he told BNamericas.

Noboa will have to make significant progress in resolving the power problems, not to mention curbing rampant crime, to persuade Ecuadorans to lend him their vote.

“If Noboa fails to achieve evident results in terms of crime, solving the electricity crisis, and the blackouts instead return in September, as well as if no actions are seen being taken to tackle unemployment, that will weaken him badly in the elections,” Cristian Carpio, analyst at political risk consultancy Prófitas, told BNamericas.

POLITICAL TENSIONS

Over the weekend Noboa accused lawmakers of “legislating in favor of criminals,” claiming that their aim in the debate of the bill to apply the results of the April 21 referendum is to reduce the heavier sentences for organized crime proposed by the executive branch. 

Noboa also said that the assembly members intend to conduct a political prosecution of foreign minister Gabriela Sommerfeld over a diplomatic conflict caused with Mexico when the police raided the Mexican embassy in Quito in April to arrest former vice president Jorge Glas on corruption charges.

These political tensions with the legislature will likely get worse as the elections come closer, so Noboa will not receive any respite on that front and he will come under ever-greater public scrutiny of the actions taken to resolve the nation's problems.