PetroEcuador seeks expansion of Shell crude sales

PetroEcuador said it has asked Shell to expand an existing crude offtake agreement nearly two years before it is scheduled to end.

In December 2019, PetroEcuador signed a deal with Shell to sell 20.16mn bl of heavy sour Oriente crude through December 2023in 56 cargoes of 360,000 bl each. PetroEcuador delivered 4.2mn bl through December 2021 but wants to sell more crude to Shell under the same conditions. The current agreement is for a $0.71/bl premium over the spot market price of Oriente crude.

PetroEcudor said in a meeting with Shell is discussed "options to increase the volume of crude destinated to this agreement." PetroEcuador is offering for Shell to use the OCP Punta Gorda terminal to receive the crude using larger vessels, such as 1.08mn bl Suezmax, to reduce its crude transportation costs. Shell currently takes crude cargoes from Balao terminal, where the maximum vessel capacity it 720,000 bl.

Ecuador is trying to renegotiate sale long term crude agreements with PetroChina, Unipec and Thailand's state-owned oil company PTT to get better conditions for the South American country.

PetroEcuador exported 101.28mn bl of crude in 2021, with about 10pc of that volume sold in spot sales.

By Alberto Araujo