Ecuador’s President Guillermo Lasso said on Tuesday he will seek to disconnect the handover of crude from outstanding debt to China during a visit to the Asian country next month, part of his plan to renegotiate some $4.1 billion in debt.
In the last decade China has become Ecuador’s primary financial partner, with crude for credit agreements, open credit arrangements and multi-million dollar investments in the mining industry and dams.
“We are going to seek better terms and above all we are going to untie oil from debt payments to China, so that oil is freely available to the Ecuadorean government,” Lasso told local radio. “That is the big challenge of this negotiation that I expect to start on this next visit to China.”
Lasso said he will seek to renegotiate $4.1 billion of Ecuador’s debt to China with his counterpart President Xi Jinping. Another $500 million in credit is part of long-term contracts with more favorable interest rates and will not be renegotiated, he added.
Ecuador has signed 16 contracts for crude with Asian oil companies which are tied to loans from Chinese banks, in conditions considered by analysts to be unfavorable to Ecuador.
The South American country still has to turn over 160 million barrels of crude to the Asian companies by 2024, Italo Cedeno, head of state oil company Petroecuador, told local radio on Monday.
“It would be better if in a renegotiation we achieve a longer time limit so we can have more oil to sell on the spot market,” Cedeno said.