Exclusive: Ecuador concludes a pre-agreement with the Thai PTT to renegotiate the oil-for-loan agreement
(Reuters) – Ecuador has reached a preliminary agreement with a Thai state-run PTT PCL unit to extend until 2024 the payment period of an oil-for-loan deal that was initially to be fully paid until 2024. in 2022, the country’s energy minister said. said Thursday.
State-owned oil company Petroecuador was due to deliver up to 85 million barrels this year to PTT and PetroChina to amortize loans made by companies to the nation over the past decade.
But those deliveries would have made it difficult for Ecuador to meet other long-term commitments, Minister René Ortiz told Reuters in an interview.
The renegotiation with the PTT, which should not involve an adjustment of the interest rate of the loan, would leave the possibility for Petroecuador to refine part of the country’s oil production, to export up to 10% on the spot market. and honor supply contracts with customers. including Royal Dutch Shell and Phillips 66.
If the proposed deal is signed this year, PTT and PetroChina will jointly receive up to 77 million barrels of Ecuadorian crude per year until 2024, Ortiz said.
“(This) would ease our commitments and improve Petroecuador’s ability to sell directly to other buyers and make cash sales,” Ortiz added.
Ecuador still needs to deliver more than 230 million barrels of oil to PTT and PetroChina to fully repay the loans. A similar refinancing deal with PetroChina is currently not on the negotiating table, Ortiz said.
The minister also said Ecuador was not yet negotiating a reparations pact with trading company Vitol after a unit of the company agreed to pay a total of $ 164 million to resolve an investigation. of the US Department of Justice on corruption in the region. In Mexico, Vitol offered more than $ 30 million in compensation to state-owned oil company Pemex.
“At some point, we will have to reach a level of understanding between the parties,” he said, adding that Vitol had stayed out of Ecuador’s oil tenders in the meantime.
Ecuador is looking to award energy projects in the coming months to secure upstream investments, now that it brings in between $ 61 and $ 65 a barrel for sales of its Napo and Oriente crudes.
The Andean nation’s production fell nearly 10% to some 479,250 barrels per day (bpd) last year, mostly due to pipeline interruptions, according to figures provided by the Energy Ministry to Reuters .
The government has started receiving bids for the flagship Sacha oil field – where production is expected to rise from its current level of 68,000 b / d of crude to 85,000 b / d once in private hands – as well as the project. TermoGas aiming to reuse the increasingly slowed down infrastructure of Petroecuador for gas supply to factories.
The final contracts are expected to be signed by the next government after the second round of the presidential election in April, which will be challenged by left-wing economist Andres Arauz and conservative banker Guillermo Lasso.
In addition to a separate marine terminal, a solar power project and a wind farm, Ecuador also plans to transfer its 110,000 bpd Esmeraldas refinery to a private operation.
A consortium comprising the American company KBR and the South Korean company Hyundai Engineering Co. is expected to submit a bid “in the coming days” for the refurbishment, modernization and operation of the facility as part of a 3-year project. billion dollars, Ortiz said.
“Ecuador is a dollarized economy, built on three pillars: foreign direct investment, exports and external debt,” Ortiz said. “The next administration, on any political side, will be interested in continuing these processes.”
Reporting by Marianna Parraga in Mexico; additional reporting by Alexandra Valecia in Quito; Editing by Luc Cohen, Matthew Lewis and Rosalba O’Brien