QUITO, July 20 - Ecuador is negotiating a two-year oil supply contract with China for which the Andean country would receive $1 billion as an advance payment, Economic Policy Minister Diego Borja told Reuters on Monday.
"(The $1 billion) is a down payment for oil sales. We're going to agree to supply 96,000 barrels per day at the day's price for 24 months," Borja told Reuters in a telephone interview.
Borja said that negotiations with China are still on-going, and that the board of directors of state-run oil company Petroecuador gave the government the go-ahead to continue with the talks on Monday.
According to the Chinese customs office, China imported 326,000 tonnes of crude oil from Ecuador in the first four months of 2009.
The-OPEC member nation produced over 485,000 barrels of crude oil per day in May.
Borja also said that Ecuador is negotiating a $1 billion loan with China, but declined to give details.
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.
The deals could help the Ecuadorean government to 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.
China has sought to secure oil supplies from South America in recent months.
Earlier this year, the China Development Bank [CHDB.UL] signed a deal to extend a $10 billion line of credit to Brazilian state-owned oil company Petrobras (PETR4.SA) (PBR.N) for future supplies.
In February China agreed to give $4 billion in financing to Venezuelan state oil company PDVSA, which has increased shipments to China to reduce Venezuela's traditional reliance on U.S. energy markets.
"(The $1 billion) is a down payment for oil sales. We're going to agree to supply 96,000 barrels per day at the day's price for 24 months," Borja told Reuters in a telephone interview.
Borja said that negotiations with China are still on-going, and that the board of directors of state-run oil company Petroecuador gave the government the go-ahead to continue with the talks on Monday.
According to the Chinese customs office, China imported 326,000 tonnes of crude oil from Ecuador in the first four months of 2009.
The-OPEC member nation produced over 485,000 barrels of crude oil per day in May.
Borja also said that Ecuador is negotiating a $1 billion loan with China, but declined to give details.
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.
The deals could help the Ecuadorean government to 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.
China has sought to secure oil supplies from South America in recent months.
Earlier this year, the China Development Bank [CHDB.UL] signed a deal to extend a $10 billion line of credit to Brazilian state-owned oil company Petrobras (PETR4.SA) (PBR.N) for future supplies.
In February China agreed to give $4 billion in financing to Venezuelan state oil company PDVSA, which has increased shipments to China to reduce Venezuela's traditional reliance on U.S. energy markets.
