China's Expanding Involvement in the Latin American Energy Sector

Ecuadorian Vice President Jorge Glas announced July 6 that one of China's state-owned oil companies, China National Petroleum Corp., will take a 30 percent stake in Ecuador's $12.5 billion Refinery of the Pacific, which will have a refining capacity of 300,000 barrels per day. The announcement is the most recent manifestation of a trend that has slowly unfolded over the past decade. China's originally simple relationship with Ecuador and Venezuela, primarily involving oil-for-loan agreements, has morphed into much more complex relationships involving investments throughout the energy production process, from financing to production to refining. Because these deals satisfy Beijing's overseas energy strategy, as well as Quito's and Caracas' own strategic imperatives, this already close cooperation is likely to expand in the years to come.