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Ecuador would suffer a reduction in oil revenues because of the contracts modality with China
Posted On 08 Dec 2014
Ecuador has reduced its oil revenues. In part, this could be due to the modality of credit agreements and advance sale of oil to China.
A barrel of West Texas Intermediate crude (WTI), a reference to the Ecuadorian oil, closed at US $ 65.84 on December 5, which was the lowest value since July 2009. With the differential or punishment for lesser quality, the Ecuadorian Oriente crude rate stood at USD 58.21, as indicated by the Bloomberg news agency.
About 90% of Ecuador’s oil exports are with the state company Petrochina.
Crude prices show a sustained downward trend, but the depreciation for Petrochina remains the same due to the type of credit agreements and advance sale of hydrocarbons.
Although the price of Ecuadorian oil has dropped to $ 60 per barrel, the Government must continue to pay about US $ 15 for the credit to China. That means $ 45 enters per barrel sold, a 47%.
The Non-Renewable Resources Minister, Pedro Merizalde, confirmed that the state is receiving less revenue for the sales contracts of crude with China.
“Obviously there is a variation between what was invoiced before and what is now invoiced for the change in WTI prices,” the authority said without giving further details.
