Trafigura was the only company to bid for a millionaire long-term Fuel Oil 6 contract

Only one offer was presented during the opening of offers for the long-term export between 9’880,000 and 18’050,000 barrels of Fuel Oil No. 6. The bidding company was Trafigura with a guarantee from the International Bank for $ 7.1 million , and a prize of $ 0.41, would be the virtual winner of the contest.

Petroecuador’s International Trade Manager, Pablo Noboa, reported that 36 companies had been invited and 12 of them presented their excuses. And only Trafigura submitted an offer.

Noboa explained that this long-term contest seeks to maximize the results for the hydrocarbon company. He recalled that fuel oil comes from waste from refining plants. He also recalled that in Ecuador the plants have a storage capacity less than the monthly production, therefore this type of sale also helps the operation of the plants.

Another point that stood out is that it was seeking to obtain a prize from this contest. One of Petroecuador’s techniques explained that the price will be set according to the scoreboard, the current differential according to spot sales and a premium.

The long-term sale of fuel oil 6 had several setbacks this year and has received criticism from expert sectors. In the first instance, in April 2021, the tender was carried out for a volume of 13′338,000 barrels to 22′230,000 barrels of fuel oil 6. There were only three firm offers with prizes: Trafigura who offered an award of $ 0.27 per barrel, Puma with $ 0.30 per barrel and Unlimited Corp that offered the best proposal with $ 0.51 per barrel.

The criticism was that The fuel was being committed until 2023, a few days after the end of the previous Lenín Moreno government. In addition, some experts said that the three companies were related to each other, so it was not a true tender. It was also commented that this type of large volume sales favors large traders (intermediaries) who have the economic muscle. This is because banks avoid financing companies that work in extraction in the Amazon.

Trafigura is an intermediary company that has been pointed out for allegedly harming Ecuador by participating in long-term contracts with Asian companies. Globally, these days it has been mired in corruption scandals related to Petrobras. In Mexico, she was denounced by the Government for smuggling cases.

In August 2021, already in this Government the contest was invited again, but it was unsubstantiated before even opening the bids.

This time only one offer was made. This, despite Petroecuador, has opened the range for companies. Now the participants They can present the guarantee issued by a national bank with the endorsement of a foreign bank with triple A rating or also present an insurance policy issued through a national insurer, that has the backing of a reinsurer abroad. Petroecuador expanded the list of 386 to 750 banks internationally for the issuance of bank guarantees, entities that have the endorsement of the Central Bank of Ecuador.

Another change is that there may be an inclusion of the advance payment as an option to the presentation of letters of credit. In this way, the client will previously deposit the export value with EP Petroecuador. This measure is due to the difficulty in accessing letters of credit in some international entities, after the restrictions on the commercialization of crude oil extracted from the Ecuadorian Amazon.

In the next few days, the official resolution of Petroecuador on the award of the contract will be known.