QUITO – State oil company Petroecuador will deliver nearly $538 million worth of crude to PetroChina in 2012 in fulfillment of a cash-for-oil agreement, an executive with the Ecuadorian firm told Efe on Friday.

Petroecuador is due to pay back a cash advance of $1 billion – released by the Chinese state-owned oil giant earlier this year as prepayment for future oil sales – in monthly installments of $44.8 million and will do so through oil shipments, Francisco Narvaez said.

Under a broader contract, Petroecuador pledged to provide PetroChina some 71 million barrels of oil – equivalent to $6.4 billion at current prices – over a period of 30 months, the executive said.

PetroChina will deduct from that total the $1 billion it pre-paid the Ecuadorian government. Finance Minister Patricio Rivera explained in February, when the accord was made public, that Ecuador also would pay back the amount of the cash advance at an interest rate of 7.08 percent.

Narvaez said Friday that Ecuador will pay back the cash advance in full by August 2013.

The crude shipments are valued on the basis of the market price at the time of delivery – equivalent to a differential of $11 or $12 in favor of Ecuadorian crude – and the Chinese company also will pay a “premium” for ensured supplies, Narvaez said.

Ecuador shipped three-fourths of its oil to the United States a few years ago, but China has since become the top importer of Ecuadorian crude. The Chinese government also has become Ecuador’s top lender.

In July, Petroecuador head Marco Calvopiña announced another deal to export 130 million barrels of crude to PetroChina through 2017. EFE