Jul. 19, 2010 (China Knowledge) - Ecuador's oil minister Wilson Pastor last week said that Ecuador is in talks with China on an oil loan agreement, sources reported.

Pastor revealed that both parties have entered negotiations. China will offer a US$1 billion worth of loan in exchange for oil. Ecuador's state-owned Petroecuador will supply 36,000 barrels of oil or fuel per day to PetroChina International Co, a subsidiary of PetroChina Co Ltd<601857><0857><PTR>, Pastor added.

Pastor declined to disclose details of the ongoing negotiations.

The Dow Jones Newswires reported, citing the minutes of meetings signed on Jun. 12, that around US$200 million in the loan deal is expected to help Chinese companies fund their investment projects in Ecuador. The projects involve in infrastructure and oil sectors.

The remaining US$800 million of loan will be extended to Ecuador's Ministry of Finance.

In 2009, PetroChina, the country's largest oil producer, and Petroecuador inked a two-year crude oil supply agreement. The first batch of US$1 billion advance payment had delivered to Ecuador in August last year.