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Ecuador Says China Signed $2 Billion Oil Deal to Access Crude

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Ecuador's President Rafael Correa
Rafael Correa, president of Ecuador. Correa, who more than tripled public spending since taking office in 2007, had said the government was seeking additional financing sources from China, the world’s biggest oil consumer after the U.S. Ecuador has borrowed more than $11 billion from the Asian nation in the past five years. Photographer: Meridith Kohut/Bloomberg

July 3 (Bloomberg) -- Ecuador’s state oil company got $2 billion of financing from China backed by future crude supplies, adding to funding the country has obtained this year by tapping the bond market and taking a loan from Goldman Sachs Group Inc.

The OPEC-member country disclosed the China deal in an offering circular to bond investors last month. Under the May agreement, Unipec Asia Co., a unit of China Petroleum and Chemical Corporation, known as Sinopec, prepaid for oil from PetroEcuador over an unspecified timeframe.

President Rafael Correa, who more than tripled public spending since taking office in 2007, had said the government was seeking additional financing sources from China, the world’s biggest oil consumer after the U.S. Ecuador has borrowed more than $11 billion from the Asian nation in the past five years.

The Andean country’s $2 billion bond sale last month was its first offering in international debt markets since a default in 2008. In May, Ecuador obtained a $400 million loan from New York-based Goldman Sachs by using about half of its gold reserves as collateral.

The press offices of Ecuador’s Finance Ministry and PetroEcuador didn’t immediately respond to requests for comment on the agreement with China.

To contact the reporter on this story: Nathan Gill in Quito at ngill4@bloomberg.net

To contact the editors responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net Bradley Keoun

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