A review of records conducted by Reuters revealed how China's aggressive campaign for foreign oil have managed to acquire monopoly of crude oil exports from an OPEC member.
The Organization of the Petroleum Exporting Countries (OPEC) is an intergovernmental organization designed to stabilizing income and ensure share control of petroleum or oil via coordination of oil policies. Aside from Ecuador, other OPEC member nations are Iraq, Kuwait, Iran, Saudi Arabia, Venezuela, Libya, United Arab Emirates, Qatar, Indonesia, Algeria, Nigeria, Ecuador, Angola, and Gabon.
Ecuador state oil company PetroEcuador general manager Marco Calvopiña was noted by Reuters to have been sent to China last November in order to help his government secure USD2 billion in financing. The terms of the financing agreement that was being arrangement with China included a commitment of Ecuador to sell millions of barrels of its oil to Chinese state-run firms through 2020.
Despite the dragging negotiations, Calvopiña had to wait as Ecuador had no choice after defaulting USD3.2 billion in debt in 2008. Financing from China reportedly covered 61% of Ecuador's USD6.2 billion in funds needed this year. In return, China was able to secure as much as 90% of Ecuador's oil shipments for the next several years, which was considered a rare feat in the diversified oil market of today, said the Reuters report.
Aside from Ecuador, Reuters took note of China's oil interests in other OPEC member- nations Venezuela and Angola, and countries Russia and Brazil simply by extending at least USD100 billion in financing. China negotiated at least USD43 billion in loans with Venezuela, USD55 billion with Russia, Brazil with at least USD10 billion and USD13 billion with Angola.
PetroChina International, the listed arm of state-owned parent China National Petroleum Corp (CNPC), handles 60% of the oil shipments. When asked by Reuters for comment about the report, Petrochina said, "(Our arrangements in Ecuador) are purely normal commercial contracts between two companies, (and) have proved to be mutually beneficial."
The US government, said industry observers, should be alarmed over China's growing influence in oil. US relations with both Ecuador and Venezuela have soured, said Reuters, and the news agency pointed out in its article that the leaders of both countries are outspoken critics of the US.
Johns Hopkins School of Advanced International Studies political science professor Riordan Roett said, "If China's control over South America's oil industry keeps growing, it could become a concern for U.S. policymakers."
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