Ecuador’s Petroecuador awards spot oil contract to PetroChina International

Ecuador’s state oil company Petroecuador has awarded a spot sale of 3.24 million barrels of its Oriente crude to PetroChina International Co. Ltd, it said on Friday, generating income of some $355 million for the Andean country.

PetroChina International was awarded the spot contract after offering a differential of $3.45 dollars below West Texas Intermediate (WTI) and a premium of $1 dollar per barrel, allowing it to ship the crude from the Balao or Punta Gorda maritime terminals, with the latter used by bigger tankers, Petroecuador said in a statement.

The bid by PetroChina International, a subsidiary of Chinese state oil company PetroChina Co Ltd 601857.SS, “offers the greatest comprehensive benefits to the country,” Petroecuador said.

The crude will be delivered in three shipments of 1.08 million barrels each from August to October this year, Petroecuador added.

“Current WTI prices favor us, as does the differential, and the volumes and the use of larger vessels for these exports,” Petroecuador’s manager Italo Cedeno said in the statement.

The company is focusing on exporting crude via spot sales to take advantage of high oil prices, rather than in long-term contracts.

With the sale to PetroChina International, Petroecuador hopes spot sales will represent 16% of its total exports this year – up from a typical 10% – following the renegotiation of long-term contracts with Chinese oil companies and actions to increase production, Petroecuador added.

The auction saw 41 companies invited, of which six presented offers.
Source: Reuters (Reporting by Alexandra Valencia Writing by Oliver Griffin; editing by Diane Craft)