July 24, 2009 / 12:26 AM / 8 years ago

UPDATE 2-Ecuador signs contract to export oil to China

(Adds details, background, byline)

By Eduardo Garcia

QUITO, July 23 - Ecuador has signed a deal to export crude oil to China for which the Andean country is going to receive $1 billion as an advance payment, state-run Petroecuador said on Thursday.

“Petroecuador has signed a supply contract ... with state-run company Petrochina International Company Ltd, for two years,” Petroecuador said in a statement adding that Ecuador will receive the $1 billion in the first week of August.

Under the terms of the contract OPEC-member country has agreed to export nearly 3 million barrels of crude oil a month to China, the statement said.

Petroecuador said that the $1 billion represents approximately 28 percent of the total value of the oil that Ecuador has agreed to export to China.

Ecuador produced over 485,000 barrels of crude oil per day in May.

Ecuador is also negotiating a $1 billion loan with China, economic policy minister Diego Borja said earlier this week.

The deals could help the Ecuadorean government inject liquidity into the economy, after export revenues fell sharply in the first half of the year due to low oil prices.

The country needs alternative financing after defaulting on some of its sovereign bonds last year, a move that cut the country off from the international capital markets.

Chile’s state-run energy company ENAP said last week that it had signed a deal by which Petroecuador will supply the South American country with 10 million barrels of crude oil per year. (Reporting by Eduardo Garcia; Editing by Gary Hill)

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