OREANDA-NEWS. August 01, 2012. China National Petroleum Corp is in talks with Ecuador's government over a potential investment in the OPEC-member's Pacifico refinery project, an Ecuadorean minister said.

The USD 12.5 billion Pacifico refinery is a joint venture between state-run Petroecuador and Venezuela's PDVSA. It is slated to begin production in late 2015.

"CNPC could become a shareholder ... our challenge is to find a shareholder. We hope to reach an agreement with them, but if it doesn't happen, we will look for another partner. Other companies are interested," Ecuador's minister for strategic sectors Jorge Glas said on the sidelines of a mining conference.

Glas said Ecuador was looking for a partner that would provide capital and know-how. He said negotiations with CNPC were advancing at a good pace, but that it was too early to say how much the company might invest.

The 300,000 barrel-per-day Pacifico refinery project is intended to cut domestic fuel costs for Ecuador, which has to import oil products because of low refining capacity.

Petroecuador and PDVSA plan to invest USD 1 billion this year to develop Pacifico, in addition to the USD 600 million they have already invested, the head of Petroecuador Marco Calvopina said earlier this year.

Ecuador is also in talks with China to finance the project. After excluding itself from debt markets by defaulting on USD 3.2 billion in global bonds three years ago, Ecuador has met funding needs with bilateral credit deals, mostly from China.

Total debt commitments to China amount to some USD 7.3 billion, including loans, advance payments for oil sales, and energy project financing.

Ecuador produces around 500,000 barrels of crude oil a day and sends the majority of its exports to China.