Page 7 - AsianOil Week 38 2022

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Petroecuador announces agreement

with PetroChina on oil pricing

PROJECTS & ECUADOR’S national oil company (NOC) Petroleum Corp. (CNPC), since April in a bid
COMPANIES Petroecuador announced on September 14 that to secure a better price for the oil it exports to
it had struck a deal with PetroChina on the con- China. It has been seeking, specifically, a better
These changes will ditions of sale for dozens of cargoes of crude. pricing formula for locally produced crude and
enable the release of 27 In a statement, Petroecuador said it had an extension of the deadline for deliveries of oil,
cargoes of Ecuadorean wrapped up the agreement by signing three as the contract under discussion is due to expire
crude for sale to China complementary contracts with PetroChina, in 2024.
in 2022 and 2023. which is the main subsidiary of state-owned As of press time, Petroecuador had not said
China National Petroleum Corp. (CNPC). how much oil might be included in all 107 of the
The new documents update contracts that are cargoes now slated for delivery to PetroChina at
already in force to reflect changes in the terms of spot market prices.
delivery, it reported. The NOC began working closely with the
These changes will enable the release of 27 CNPC subsidiary and other Chinese buyers
cargoes of Ecuadorean crude for sale to China in during the administration of Rafael Correa, who
2022 and 2023, in a development that will allow served as president between 2007 and 2017. The
the government to earn $709mn, the statement terms of its deals with these buyers have previ-
said. All 27 of these cargoes will be sold “on the ously been kept secret, but Ecuador’s President
spot market (daily market price), thus improving Guillermo Lasso said earlier this year that he
the level of income for each sale,” it explained. intended to make all confidential information
Petroecuador did not explicitly identify itself about oil-backed loan deals with China public.
as the seller of these cargoes but noted that the Ecuador has signed at least 15 oil-for-loans
deal would allow it to deliver another 80 cargoes deals with the Chinese government since 2008.
of crude to PetroChina at spot market prices. At Under those agreements, China pays in advance
current market rates, it said, these shipments for crude deliveries from Petroecuador, and
are likely to generate $2.4bn in income for the Ecuador uses the proceeds of those shipments
government. to cover its loan payments. The NOC and the
The Ecuadorean NOC has been in nego- other parties to the deal have never revealed how
tiations with the Chinese company, the main much crude China is receiving as a result of these
subsidiary of state-owned China National arrangements. ™

Week 38 26•September•2022 www. NEWSBASE .com P7