PetroEcuador weighs spot crude offers, Enap deal

State-owned PetroEcuador received eight offers in a tender to sell 3.96mn bl of medium sour Oriente crude, in the company's fifth spot market sale since 2014.

The volume will be divided into 11 shipments of 360,000 bl each for delivery starting on 28-30 August from PetroEcuador's Balao terminal in Pacific coast Esmeraldas province.

Glencore offered a $1.08/bl premium to the benchmark WTI price, the highest bid for an Oriente spot sale in the last four years.

Phillips 66 and Trafigura bid at premiums of $0.82/bl and $0.55/bl, respectively.

Repsol offered a $0.40/bl discount; ENI Trading -$0.45/bl; Gunvor -$1.12/bl; Enap -$1.20/bl, and Unipec Asia -$1.45/bl.

Starting in 2010, Ecuador earmarked the bulk of its crude exports to oil-backed contracts with China's state-owned PetroChina and Unipec, and with Thailand's state-controlled PTT.

In May, PetroEcuador restructured the contracts to unlock up to four 360,000 bl crude shipments per month for a total volume of 50mn bl.

PetroEcuador's international trade manager Mauricio Samaniego told Argus the company will earmark most of the freed crude for spot sales and a small proportion to medium-term agreements with refiners such as state-owned PetroPeru.

In May, the Peruvian firm purchased 2.88mn bl of Oriente crude to be delivered monthly in eight FOB shipments of 360,000 bl.

Ecuador's deputy oil minister Patricio Larrea said PetroEcuador is pursuing a similar agreement with Chile's state-owned Enap.

In 2014, Ecuador made a sole spot market sale after a three-year hiatus, but since President Lenin Moreno took office in May 2017, PetroEcuador has made three spot sales: the first in September 2017, when Glencore won a contract to purchase 2.16mn bl of the 24° API Oriente with a $0.51/bl premium to WTI.

In January 2018, PetroEcuador awarded Repsol a contract to purchase 3.6mn bl of Oriente at a $0.18/bl discount. In March, Tesoro Refining purchased 3.24mn bl of Oriente at a $0.61/bl discount.