Ecuador, China in big crude-oil deal

Rafael Correa and Petroecuador

By Mercedes Alvaro

QUITO -(MarketWatch)- Ecuador will sell 130 million barrels of crude oil to PetroChina Co. Ltd. (PTR, 0857.HK) and 18 million barrels of fuel oil over the next six years, the head of Petroecuador said Friday.

At a press conference, Marco Calvopina said that state-run Petroecuador is scheduled to send to PetroChina about 1.08 million barrels per month of Oriente crude and 720,000 barrels of Napo crude.

Agreement between the Confucius Institute and Andes Petroleum USFQ

Agreement between the Confucius Institute of the USFQ and Andes Petroleum

People close to the negotiations told Dow Jones Newswires that the oil sale is linked to a $2 billion loan contract signed Monday by Ecuador’s Finance Ministry and China Development Bank Corp.

However, Calvopina said the oil sale is not related to the loan.

“The oil sale is a commercial operation,” he said. “Both operations were negotiated at the same time, but there are two different transactions.”

Meanwhile, the people close to the negotiations said that the $2 billion loan will be supported by selling crude oil and fuel oil to PetroChina.

China has become the largest source of financing for Ecuador, following its default on global bonds in 2008.

Last August, Ecuador’s government signed a loan agreement for $1 billion with China Development Bank. This loan was supported by the sale of 36,000 barrels of crude per day from state-run company Petroecuador to PetroChina International Company Limited, over four years.

Additionally, last February, Ecuador received a $1 billion prepayment from PetroChina after both agreed to renew an agreement on the supply of Ecuadorean crude oil for two years, starting in August.

In July 2009, Petroecuador and PetroChina signed a similar agreement for Petroecuador to sell Oriente and Napo crude to PetroChina, and the Andean country received an advance payment of $1 billion.

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~ by FSVSF Admin on 1 September, 2011.

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