The Chinese Have Bought Out An Entire Country’s Oil Sector

Rob Wile
Business Insider

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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