Petroecuador has planned an important sale of crude oil, classified as spot, of 11.16 million barrels for next November 9 and which commits crude oil between December 2023 and March 2024. The commercial operation, which will represent about 1.2 billion dollars for the fiscal cash register, offers two payment options to the market. In the first, interested companies will be able to opt out with an advance payment that will be settled according to the market price, and in the second, there will be the usual process of paying foreign currency upon delivery of crude oil, with market values ​​as well. This was explained a few years ago by the new general manager of Petroecuador, Reinaldo Armijos, in a press presentation to comment on his two-month sales strategy.

The 11.16 million barrels will be 4.32 million barrels of Napo crude oil and 6.8 million barrels of Oriente crude oil. But other than that, this crude corresponds to deliveries until March 2024. Like this:

These collected funds will be allocated to issues such as the Amazon law, payments to service companies and 35% to the fiscal coffers. However, Armijos assured that this will not affect the fiscal coffers of the new Government.

The presentation was made by Armijos this afternoon, accompanied by Sebastián Brito, manager of international trade in Petroecuador and Diego Figueroa, deputy manager in the same area. These career officials are on Petroecuador’s executive staff following the departure of now-former manager Ramón Correa.

Armijos assured that this sale is taking place at the moment, given that there are favorable crude oil prices ranging between 95 and 85 dollars per barrel.

He explained that the company in its management tries to take over other sales strategies, which consist, on the one hand, of inviting refining companies to participate, as well as providing options that may be attractive to companies. He commented that the sale was completed a few days ago, in which the winner was the company Philipps 66, whose offer was a difference of -1.09 per barrel. This low penalty has not been generated since February 2021. In this way, the differences (penalties) are much better for the country compared to the differences of long-term contracts.

In addition, Armijos assured that among the crude oil sales strategies, it was decided not to extend the long-term contracts with Petrothailand, which expire next December. Nor were the medium-term contracts renewed. The differences or penalties for long-term contracts are much higher (harmful to the state), while spot contracts are better. Meanwhile, Ecuador’s export supply to Asian countries is shrinking. Thus, in 2016, the entire export offer was focused on Asian countries such as Petrochina, Unipec and Petrothailandia. Instead, in 2023, 60% was handed over to Petrochina, but 40% was fired. In addition, by 2024, the structure is expected to change and 60% will be free to go to spot sales, and 40% will remain committed to Petrochina until December 2027.