Ecuador to Sign Oil Financing Deal With China

After about three years of negotiations, the government of Ecuador is preparing to sign a financing deal with China, valued at about $7 billion, to finance a new oil refinery known as the Refineria del Pacifico, an official said.

Thirty percent of the funds needed will come from the project's partners and the remaining 70% will be financed by a group of Chinese banks headed by the Industrial & Commercial Bank of China Ltd.

An official close to the deal, who asked not to be named, said Friday that the government of Ecuador will sign the financing deal, the first tranche of which will consist of about $2.5 billion and will be disbursed soon.

Originally the refinery was a joint project between state-owned Petroecuador and its Venezuelan counterpart, Petróleos de Venezuela, or PdVSA

As part of the deal, China National Petroleum Corp, or CNPC, will take 30% in the project, and PdVSA will reduce its participation to 19% while Petroecuador will retain 51%.

Currently, Ecuador produces about 550,000 barrels of crude oil a day and hopes to expand this to about 755,000 barrels a day in 2018, when the Ishpingo-Tambococha-Tiputini oil block will be producing a peak of about 200,000 barrels a day.

(online.wsj.com Edited by Topco)