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Ecuador and Venezuela agree to oil exchange deal
Reuters
QUITO
Petroleumworld.com 01 11 07Ecuador has agreed to ship heavy crude oil to Venezuela in the first half of this year in exchange for diesel, Galo Chiriboga, the president of Ecuador state oil company Petroecuador, told reporters on Wednesday.
Petroecuador agreed to send the first batch of 36,000 barrels per day of Napo heavy crude oil extracted from the fields once operated by U.S.-based Occidental Petroleum starting in March, he said.
In exchange, Ecuador will receive 220,000 barrels of diesel from Venezuela by the end of February in what Ecuadorean officials have said will save the country millions of dollars by shunning intermediaries.
The deal is part of an effort to jump-start a swap agreement signed by both countries last year and suspended shortly after when Ecuadorean officials argued that there would be no benefit for their country.
"Now we had a good negotiation between both companies," said Chiriboga at a news conference in Quito.
President-elect Rafael Correa, a leftist U.S.-trained economist who will take office on Jan. 15, has said he wants to strengthen oil ties with Venezuela.
Correa boasts a close friendship with Venezuelan President Hugo Chavez, a foe of the United States, and plans to renegotiate foreign oil contracts to boost state control over energy resources.
A Petroecuador and Venezuelan state oil company PDVSA joint commission will analyze the final details of the swap depending on market prices to determine the exact volume to be exchanged during the one year-long pact.Ecuador has the option of asking Venezuela for more refined products and delivering a larger quantity of crude which could top 75,000 bpd depending on domestic demand.
Ecuador, the fifth-largest oil producer in South America, lacks sufficient crude refining capacity and spends billions every year importing refined products from abroad.
The Andean country expects to spend $2.4 billion on imports this year.
Reuters 10 01 07
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