Ecuador signs MoU with UAE to pave way for oil purchases

QUITO - Ecuador on Thursday signed a memorandum of understanding (MoU) with the United Arab Emirates that paves the way for state oil company Abu Dhabi National Oil Company (ADNOC) to purchase oil from the South American country's state oil firm, Petroecuador.

"It establishes a roadmap for ADNOC to purchase Ecuadorean oil in the medium and long term and to develop joint marketing schemes that will allow Ecuador to access refined fuels directly, bypassing intermediaries," the Ecuadorean Ministry of Environment and Energy said in a statement.

Historically, much of Ecuador's oil has been sold to international traders who then flip it to refineries, often resulting in lower net prices for the country. 

Since Ecuador has limited refining capacity, this “fuel-for-oil swap” helps solve its domestic fuel shortage while bypassing expensive private intermediaries.

The agreement includes a roadmap for ADNOC to provide technical expertise in optimizing Petroecuador's upstream operations and logistics.