China has invested heavily in Ecuador since the Andean country cut itself off from world capital markets by defaulting on global bonds in 2008, with Beijing becoming the Latin American nation’s chief source of external finance.
Petroecuador — whose exports in May totaled 10.1 million barrels — said it would sell 130 million barrels of Oriente and Napo crudes over a six-year period to PetroChina as well as 18 million barrels of fuel oil.
“We have received a premium (in the contract) of 74.5 US cents per barrel. A very good premium and on the other hand it’s going to be revised upward,” Petroecuador President Marco Calvopina told reporters.
That agreement was independent of previous deals that China and Ecuador have signed. In February, Quito received $1 billion from Beijing’s state-run PetroChina in a cash-for-oil agreement. Ecuador is OPEC’s smallest member.
Beijing has signed credit deals worth billions of dollars with Ecuador over the last few years — a theme played out across many developing countries as energy-hungry China tries to secure natural resources.
In a communique late on Thursday, Ecuador’s Finance Ministry said it planned to sign the 15-year loan worth $571 million in August with China’s Eximbank to help fund the 487-megawatt Sopladora hydroelectric power project.
Terms include a four-year grace period and an interest rate of 6.35 percent, the statement said.
“This financing represents 85 percent of the approximately $670 million total cost of the hydroelectric plant,” it said.
The news of that credit takes the total announcements of Quito’s financial agreements from China to around $7.3 billion since 2009, including loans, advance payments for oil sales, and energy project financing.
Ecuador’s foreign debt represents 15.3 percent of the nation’s gross domestic product, the central bank says.
Some analysts have questioned the credit operations and crude sales to China, saying that Ecuador is becoming too dependent on the Asian country.
“The fundamental problem is the liability of the next government ... It’s not responsible to commit oil that’s going to be administered by a future government,” oil analyst Luis Calero told Reuters.
