South-South Cooperation -- Ecuador seeks $280 million credit line from Iran

Ecuador is reaching out to its new buddy, Iran for a credit line of $280 million usd to finance pipeline and other oil-sector related projects according to what Mining and Oil Minister Derlis Palacios told the Dow Jones Newswires yesterday (click here for the article, provided via Rigzone).

Senor Palacios seems confident Ecuador will get the money too. Stating in a telephone interview "We are asking for a credit line of $280 million, especially to invest in our pipelines. We are sure that this money will come."

This is all very intriguing. I must admit Correa has done some good for Ecuador and my opinions on him have personally evolved over the years, and in a positive way. However, messing around with Iran on the heels of months of intense fighting with foreign companies and THEN causing hysteria with the country's bonds will definitely reverberate for years to come in the international community.

Yes, it is true Ecuador probably would probably have a hard time securing a loan from any normal western financial institution and that it has all the right in the world to look elsewhere. I just question the path Correa and the political big whigs in Ecuador think is best for the future of Ecuador.

If the political situation changes and new leadership seeks to pursue a different path, one less antagonistic of the international community perhaps, it will be a hard process of re-affirming confidence after all of it.

However, if the world was fair I think Ecuador should be able to go ask Iran for a loan if it wants. They are in the end both developing countries that could probably benefit from cooperating with one another. Sadly we don't live in a fair world, and considering the degree to which Ecuador is connected to the international financial system, I think it should have thought a bit more carefully about its foreign policy in the last year or so.

Souh-South Cooperation: Ecuador and Chile join forces to explore for gas in Guayaguil Gulf

“The board of Petroecuador has accepted the proposal for a new joint company with ENAP”, said Mines and Petroleum minister Galo Chiriboga in Quito.

The minister added that the new joint company will “boost gas exploration in the gulf of Guayaquil”, to the southwest of Ecuador where primary surveys have indicated the possibility of significant natural gas deposits.

Petroecuador is also involved in a similar undertaking with Venezuela’s PDVSA, with the purpose of searching for gas in an adjacent area in the gulf.

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Click here to access the full story from MercoPress

PetroVietnam and Petroecuador sign strategic energy cooperation agreement

PetroVietnam, Petroecuador sign a strategic agreement to start cooperating in oil and gas field exploration, production, transportation, storage, processing and trading said state media on Saturday in Hanoi, Vietnam.

(Click here to view full article from smartmoney.com)

The agreement will be valid for two years, which really makes it more of a "test" to see if the two countries national oil companies can function efficiently with one another. Two years in reality is a short time period if they hope to accomplish all the above listed cooperation objectives. It will no less allow the two countries to see if this new strategic alliance is worth pursuing.

It is refreshing to read news of cooperation between countries in South America and other Asian countries aside from the China. China is undoubtedly the "juggernaut" of Asia's emerging markets, but it is hardly alone, and developments such as this are proof that South America will grow closer to Asia as a whole with time... not just the PRC (China).

China-South America Trade and Finance will continue to monitor this development between Vietnam and Ecuador, and post updates to keep readers up to date on this new trans-pacific alliance.