Ecuador Negotiated Thailand Crude Sales on Favorable Terms

Ecuador's oil-for-loans agreement with Thailand was struck on favorable financial terms, President Rafael Correa said late Tuesday, assuring the Andean nation has sufficient oil production to carry out the operation.

State-run Petroecuador in June signed a crude supply agreement with a division of Thailand's state-run PTT to supply some 116.6 million barrels of oil in exchange for an up-front payment of $2.5 billion.

"The interest rate is very good, it is about 7 percent and the loan term is at least five years," Correa told reporters during a tour of the Esmeraldas refinery, adding the deal would help the country cope with low oil prices.

The oil to be delivered to Thailand will come from state-run oil fields, whose production has been sustained despite adverse circumstances, Correa said.

The up-front crude sale to Thailand follows several similar deals struck with China between 2009 and 2014.

The largest portion of Ecuadorian crude exports go to Chinese firms under oil-for-loan agreements.

The companies are not required to deliver the barrels to China, meaning that firms can resell the oil on the open market.

The smallest member of the Organization of the Petroleum Exporting Countries (OPEC) exported about 154.7 million barrels of crude oil last year and produces about 550,000 barrels per day, according to official data.

(Reporting by Alexandra Valencia)