Ecuador’s state oil company Petroecuador said on Wednesday it has reached an agreement with Chinese oil company Petrochina 601857.SSon some deliveries of crude oil, part of a renegotiation of long-term contracts between the two companies.

With the agreement, 27 shipments of Ecuadorean crude for 2022 and 2023 will be liberated for sale, while Petroecuador will deliver another 80 at the spot market price to the Chinese firm.

Petroecuador began negotiations with the Chinese oil firm last April in order to improve the price formula for Ecuadorean crude and the extension of the delivery schedule for shipments, which was set to expire in 2024.

Both state oil companies signed three complementary contracts on Sept. 9 to update crude delivery conditions, the same ones that are in force, Petroecuador said in a statement.

The Ecuadorean oil company signed long-term crude sales agreements with several Asian companies during former President Rafael Correa’s government, allowing the Andean country to access credits with Chinese banks.

The complementary agreements are related to the release of 27 cargoes for 2022 and 2023. Petroecuador did not specify the equivalent of the cargoes in barrels of oil.

The released crude “will be placed on the SPOT market (daily market price), thus improving the level of income for each sale,” the state oil company said, adding that the new conditions will make possible income of $709 million.

Petroecuador also said that it will deliver 80 shipments to Petrochina at the spot market price, “which will generate $2.4 billion, according to current price calculations.”

The announcement comes a day after Petroecuador reported the resignation of the company’s international trade manager, Pablo Noboa, who was leading the negotiation with the Chinese oil company.
Source: Reuters (Reporting by Alexandra Valencia; editing by Jonathan Oatis)