Dozens of documents reveal the participation of European banks in the Ecuadorian crude brokerage plot with China

The plot of oil brokerage, derived from contracts between Ecuador and Chinese and Thai companies, is complicated and extends to certain European banks. Dozens of documents (endorsements of bills of lading) delivered by Petroecuador to the Supervisory Commission of the Assembly, reveal how more of the oil intermediaries that resold Ecuadorian crude, also “intermediary” banks participated, financing the operations of said traders. This reveals the last link in the chain: the role of European financiers who work with questioned intermediaries such as the Russian Gunvor, which, according to statements by its senior executives, paid bribes to obtain contracts with Asian companies.

According to Assemblyman Fernando Villavicencio, president of the Supervisory Commission of the Assembly, the endorsements of the bills of shipments delivered by Petroecuador reveal that the Ecuadorian crude, consigned to the Asian companies Petrochina, Unipec and PTT, as payment of the debt that the country contracted with China, “was marketed by the European banks ING Belgium, Geneva branch, Natixis de Paris and Société Générale de Paris.” In most cases, according to the documents, the oil was delivered to Gunvor and Core Petroleum, part of the same group. In the end, the crude arrived in Petroperú through intermediaries. The participation of these banks, says Villavicencio, shows that China did not finance Ecuador, but rather lent us our own money.

Only with China, Petroecuador has reported that between 2009 and 2016, 1,365 million barrels were committed as a guarantee of payment of the $18,170 million received by the country, with interest of up to 7.37%, plus charges for financial costs. of said credits. To date, Petroecuador has delivered 1,174 million barrels and 156 million are pending delivery.

Meanwhile, Raymond Kohut, a former Gunvor executive, has admitted in US courts that he handed over around $70 million, between bribes and commissions for Petroecuador to award the contracts to the Asian companies, between 2012 and 2020. With this, Gunvor “helped obtain financing for approximately $5.4 billion in oil-backed loans”, with a view to “obtaining and retaining” business in Petroecuador.

Just these days the President of the Republic, Guillermo Lasso, has visited China to, among other issues, negotiate the debt that Ecuador has, product of these contracts. His aspiration, announced before the trip, was that he hopes to untie the Ecuadorian crude oil committed for sale tied to credit lines.

According to Villavicencio, this brokerage scenario is known to President Lasso and was expected to be part of the discussions on the Chinese debt issue. Villavicencio recalled that at the time, the Treasury Department said that Russian President Vladimir Putin had investments in Gunvor and access to its funds.

When reviewing the endorsements received by Fiscalización, a pattern is observed, a story that repeats itself: Ecuadorian crude leaves from Esmeraldas in a ship called Kerala. This crude has been sold to a Chinese company such as Unipec, which delivers the cargo to the Natixis bank in France, which in turn delivers it to the intermediary Gunvor, which finally sells the crude to Petroperú. In the same way, the Commander ship transports crude oil purchased by PTT (Petrothailand) that will later reach the hands of the ING Bank of Belgium, to go to Gunvor and arrive in Petroperú. In the Gulf Stream, the crude oil was also delivered to Petrochina, but it endorses ING of Belgium, which in turn delivers it to Core Petroleum, always destined for Petroperú.

The participation of six European banks (Natixis of France, ING of Belgium; Credit Suisse, UBS, BNP Paribas and Rabobank) in the financing of the commercialization of crude oil from the Ecuadorian Amazon began to raise alerts worldwide, when an investigation by Amazon Watch and Stand.Earth was released several months ago. The key discovery was that, despite his basic principles of protecting the planet, Since 2009, the six entities have granted financing, especially through letters of credit, to the trade of approximately 155 million barrels of crude oil from the Amazon in Ecuador to refineries in the United States, for a value of around $10,000 million. . “This volume of crude contains about 66.65 million metric tons of CO2, equivalent to the annual emissions of 17 coal-fired power plants,” the environmental organizations report said.

After the report, and approaches of these defenders of the environment se announced that these entities have agreed to stop financing, due to the environmental conflict represented by the oil industry in the Amazon.

In accordance with Fernando Santos Alvite, former Minister of Energy, These banks finance the operations of the traders such as Gunvor, Castor, Taurus, Trafigura and Glencore, most with European headquarters. He assures that Petroecuador’s bills of lading show that the Chinese or Asian company bought the crude, but it was not the Chinese banks that delivered the letters of credit as would have been thought. Rather the letters of credit came from European banks such as Gunvor. “China only put the name and the real buyers were these other companies,” he explains.

For Santos, this has been a sort of collusion with the traders, taking advantage of the quality of a state company to avoid entering bids. The story that follows is well known: they managed to place loans at a high rate and with collateral guarantee; obtain crude oil at a lower price with a difference of $3.6 per barrel in relation to the market price, while the awarding of contracts was encouraged by bribes that have been confessed by Raymond Kohut, a former Gunvor strongman.

Kevin Koenig of Amazon Watch explained to this newspaper that the closing of the financing will be immediate, in some cases and in others it could take time. For example, Natixis had mentioned that it will not make new contracts, however, it must comply with the current ones that last until 2023. Koenig said that the studies carried out on the oil financing operation in Ecuador led them to establish these bad environmental practices, but also to understand that these have occurred in an opaque climate in the operations. “The crude is sold to China, but that crude does not reach that country, but California,” he says. He also explains that there will be more and more restrictions on the oil issue in the Amazon basins, especially after the recently generated claims. For this reason, he considers it opportune to start looking for new economic outlets for the country. Leaving the oil in the ground and having the countries finance this initiative could be a way.

On the subject of the lack of financing by these banks, the state-owned Petroecuador had announced that its operation is carried out in strict compliance with the legislation Ecuadorian on safety, health and environment. He explained that it has 250 environmental licenses issued, and 38 in process in the Ministry of the Environment. But, in addition, Petroecuador has been forced to change the financing rules to give facilities to companies. Now the guarantees can be issued by a national bank with the guarantee of a foreign bank with a triple A rating or they can also present an insurance policy issued through a national insurer, with the backing of a reinsurer abroad. In addition, the list was expanded from 386 to 750 banks on an international scale for the issuance of bank guarantees. Advance payment was also included as an option to the presentation of letters of credit.