Rob Wile
Business Insider
11/26/2013
The Chinese have taken control of Ecuador’s oil sector, Reuters’ Joshua Schneyer and Nichoals Medina Mora Perez report.
Finding themselves largely shut out of credit markets since defaulting on $3.2 billion in debt in 2008, Ecuador turned to China.
In exchange for covering 61% of the country’s $6.2 billion financing needs in 2013, China last November secured the rights to up to 90% of Ecuador’s oil shipments in coming years (for comparison, China holds 23% of U.S. debt just held by foreigners).
What’s more, little of the oil actually gets shipped to China. Instead, Chinese oil firms are able to sell the oil to would-be Ecuadorean trading partners and capture an enormous discount. Reuters says Ecuador’s annual oil sales are valued at $13 billion, and China’s cash advances cover only a “slice” of that near $13 billion Ecuador could earn from oil sales.
The U.S. is the largest recipient of Ecuadorean oil…
The article continues at Business Insider.
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