![]() By mid-2013, Chinese state-controlled firms were allocated 83 percent of Ecuador’s oil exports. A year later the volumes had nearly doubled. Ortiz and other critics say the cash-strapped government’s dependence on loans with increasingly onerous terms could hurt PetroEcuador’s competitiveness, damage transparency in an oil industry that accounts for half of Ecuador’s exports, and distance the country from other creditors.Ĭontracts, company presentations, and crude loading schedules show how China has come to dominate trading of Ecuador’s 360,000 bpd of oil exports since its biggest listed oil company, PetroChina, first offered PetroEcuador $1 billion in financing in mid-2009.īy April of 2010, Chinese firms were receiving around a third of Ecuador’s export oil. President Rafael Correa, a socialist who is critical of the power that Western oil majors and private energy trading firms once held in Ecuador, has touted the Chinese deals as a triumph of trade between close allies. Yet less than 15,000 bpd is being shipped to China this year, down nearly 40 percent from 2012. The oil that Ecuador sells to Chinese firms can be traded anywhere. But China’s role in the Andean country shows how the Asian giant’s oil firms are becoming powerhouse traders in energy markets far from home. “Never before has Ecuador committed its oil to a lender.”Ī small OPEC exporter, Ecuador pumps around 520,000 barrels per day (bpd), or 5 percent as much oil as kingpin Saudi Arabia. “This is a huge and dramatic shift,” said Rene Ortiz, a former Ecuadorean energy minister and secretary general of the Organization of the Petroleum Exporting Countries. In return, China can claim as much as 90 percent of Ecuador’s oil shipments in coming years, a rare feat in today’s diversified oil market. Shunned by most lenders since a $3.2 billion debt default in 2008, Ecuador now relies heavily on Chinese funds, which are expected to cover 61 percent of the government’s $6.2 billion in financing needs this year. In reality, Calvopiña had little choice but to wait. “If the Phase III transaction documents are not signed in the coming days, then I cannot remain in Beijing,” he wrote in a confidential letter to China Development Bank (CDB), reviewed by Reuters. Calvopiña grew anxious and threatened to leave. Negotiations, which included committing to sell millions of barrels of Ecuador’s oil to Chinese state-run firms through 2020, dragged on for days. Last November, Marco Calvopiña, the general manager of Ecuador’s state oil company PetroEcuador, was dispatched to China to help secure $2 billion in financing for his government. NEW YORK, Nov 26 (Reuters) - China’s aggressive quest for foreign oil has reached a new milestone, according to records reviewed by Reuters: near monopoly control of crude exports from an OPEC nation, Ecuador. (For more Reuters Special Reports, double-click on )
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