Imagine an oil auction were the winners would have to contend with the following:
- Chinese firms serving as middleman in most of the oil sales, while keeping an option to divert barrels to China if needed.
- Private operators are paid fees based on per-barrel production, rather than owning the crude that they extract.
- Indigenous groups inhabiting the drilling zones were not consulted.
- And the country has penalized a major oil producer with a $19billion fine and decades-long lawsuits.
If you’re surprised that they received three bids (as opposed to none), bear in mind that
China’s Andes Petroleum Co. submitted offers for blocks 79 and 83, while Spain’s Repsol Cuba submitted an offer for block 29.
Repsol Cuba, by definition, is a sucker for punishment.
More on China and Ecuadorian oil at Petroleum World.