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Venezuela to Provide Ecuador 600,000 Barrels of Crude

Posted on: Saturday, 27 August 2005, 09:00 CDT

Venezuela to provide Ecuador 600,000 barrels of crude

QUITO, Aug. 25 (Xinhua) -- Venezuela is to provide Ecuador with 600,000 barrels of crude in a loan agreement to make up the shortfalls in Ecuador's oil production.

The loan agreement came since Ecuador was forced to suspend its own crude production due to a strike in its oil-producing northeastern provinces of Orellana and Sucumbios.

The oil will be paid in money instead of crude production as the type of Ecuador's crude is different from that of the Venezuela's, according to government officials here Thursday.

Ecuadorian Economy Minister Magdalena Barreiro said Ecuador has asked for six months grace period to pay for the crude.

"I've asked them for at least six months of grace because the return of oil becomes complicated as they have a different sort of petroleum," said the minister, who held a meeting with Venezuelan authorities in the country's capital Caracas to sign the loan agreement last Tuesday.

The minister said the government wants to pay the Venezuelan oil in monthly installments without interests as of the second half of 2006.

The strike held in Ecuador's oil-producing northeastern provinces of Orellana and Sucumbios, was organized to demand greater spending on infrastructure and social programs, which forced the Ecuadorian government to suspend the export and production of crude last week.

Oil production is now being slowly resumed in Ecuador. However, losses could reach 400 million US dollars from now to the end of the year, said the government.

Ecuador is Latin America's fifth largest oil producer, producing 541,000 barrels of crude per day, of which 201,000 barrels are contributed by state-run Ecuadorian firm PETROECUADOR and the rest by foreign firms.

Source: Xinhua News Agency - CEIS

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