He the difference in crude oil exports per barrel, recorded in January 2023, in long-term contracts with Asian companies, was the worst in the country’s history.

In that month, the differences from – $15.01 per barrel of Oriente crude oil and – $21.01 per barrel of Napo crude oil.

This negative-sign differential is the penalty that Ecuadorian crude oil receives against WTI, both because of its quality and the freight conditions paid for transportation through the Flopec EP. It is interesting that the freight rate in that month was the highest when it comes to $9.85 per barrel, since Panamax ships are used, with a rate of $10.16 per barrel, and Aframax, with a rate of $8.99 per barrel.

He load weight in the formula -determine the differential of these contracts- is 73% on average, so these high freight rates, from which Flopec EP benefits, represented significant damage to the price of Ecuadorian crude oil and to Petroecuador.

This is how he reveals it the information sent by Petroecuador to the Supervisory Commission and requested by the representative Fernando Villavicencio, in the midst of an investigation conducted to determine the functioning of Operation Flopec EP, all related to the impeachment of the President of the Republic, Guillermo Lasso.

From what is known, the current accusation against President Lasso is that his government kept the damaging Amazonas Tankers contracts signed by Luis Codoy in 2018 (with a history going back to 2013 with the Andes Tankers contracts), and that they affected Flopeca by 6 .1 million dollars (although the supervisor considered it an administrative error, not a criminal offense).

However, the president Lasso showed that the alleged losses for Flopec were corrected in his Government, by accepting 13 recommendations of the Supervisory Office. In this sense, the assumption embezzlement would not exist.

However, what the numbers reveal is an aspect that neither the Comptroller’s Office, nor President Lasso, nor his interpellators allude to: when rates are lower for Flopec, crude oil prices improve for the country. On the other hand, when Flopec rates go up, Petroecuador gets hit.

A report from the International Trade Authority of Petroecuador found that on average in the first quarter of 2023, the difference of Oriente crude oil was -$14.14 and Napo was -$20.52.

These differences are much larger than those registered, for example in 2020: -$4.46 for Oriente oil and -$8.14 for Napo oil. And also from 2021, when they were at -$5.60 for Oriente and -$8.38 for Napo. By 2022, the differences have already grown to -9.56 USD and -14.76 USD, respectively.

According to Villavicencio, the information provided by Petroecuador reveals a reality that has been hidden for years, which affects the entire marketing chain of hydrocarbons, due to the high cost of maritime transport, by increasing or increasing the penalties in different purchase differences. and the sale of Petroecuador.

This is more tangible in long-term contracts for the sale of crude oil (with China and Thailand), which are in force from 2009 to 2024, because the freight factor is decisive in this formula. This means that for the price of crude oil for these contracts, the formula is taken into account: WTI – Asian differential + premium. But to determine the Asian differential add up: the index The ASCI crude oil differential, quality adjustment and freight factor are subtracted.

The latter, the freight factor, is determined by figures obtained from route and ship averages sent monthly by the Association of North American Brokers and Agents (ASBA). In turn, ASBA, in the Ecuadorian case, is delivered to brokers such as McQuilling Partners, Dietze & Associates, Odin Marine Group, Poten & Partners, MJLF & Associates, some of them are marine consultants and brokers for Petrochina International and other intermediaries.

It therefore becomes crucial to know what type of vessel the crude oil is transported on, as depending on their size – due to economies of scale – the price is lower if contracted through the largest vessels such as VLCCs and Suezmax. Unfortunately, among the ships used for export in the period from January 2020 to March 2023, the use of smaller ships prevails: Panamax and Aframax.

According to Villavicencio, it was found that the transportation of Flopec is carried out through the Amazonas Tankers Pool (which has the smallest vessels), which directly benefits all its partners, and in two ways, since the partners turn out to be rent-seeking intermediaries. ships, and there are also high costs.

The thing is Flopec maintains 5 own vessels, one of which is Panamax and 2 Aframax for export. This fleet is insufficient, which is why associations or pools have been formed that enable chartered vessels and cover transportation needs. One of the associations is Amazonas Tankers, which also charters vessels to third parties.

In the current situation, while the political trial of President Lasso is progressing, Villavicencio commented that “Lasso could be fired for the alleged embezzlement committed in the government of Rafael Correa and Lenín Moreno, since he allowed these contracts to continue, due to the lock-ins that exist in the contracts. “

As for the impacts that exist for Petroecuador, in the coming years, due to the differences, he said, an investigation has already been requested from the Supervisory Office, the results of which will be seen in the future.