Ecuador’s state-owned oil company has amended its payment terms and conditions to ease financing constraints for buyers affected by the hasty retreat of international banks from deals involving Amazonian crude.

Petroecuador says in a statement that it will almost double the list of foreign lenders that can provide guarantees for the sale of its oil, from 386 to 750, while it will also accept guarantees issued by domestic financial institutions (FIs) so long as they are backed by an international bank with a triple A rating.

Likewise, the state company says buyers can present an insurance policy issued domestically but backed by a reinsurer abroad.

In another amendment, Petroecuador says there is also the option for a company to deposit the export value in advance as an alternative to presenting a letter of credit (LC).

Ecuador’s oil company says these measures have been taken to help buyers struggling to source letters of credit (LCs) from international banks, who in the past two years have restricted financing for transactions involving crude sourced from Ecuadorian parts of the Amazon rainforest.

Activists say that oil sourced from the region contributes to climate destruction globally and directly impacts indigenous communities, whose health and food security has been threatened by multiple oil spills.

In a January report, campaign groups and Amazon Watch revealed that BNP Paribas, Credit Suisse and ING had all confirmed in writing they would no longer accept new transactions involving the sale of such oil.

The trio were previously responsible for financing sales of Amazon oil to buyers in the US worth a total of US$5.5bn since 2009, equivalent to more than 50% of all financing provided for such trade, the report says.

The campaign groups analysed 19 lenders in total and showed that BNP Paribas, Credit Suisse, ING,  Rabobank, UBS and Natixis accounted for 85% of all bank-financed trade linked to Amazon oil “despite having policies on advancing human rights, sustainability, and climate change”.

As for the other lenders, Rabobank reportedly ceased financing Ecuadorian crude exports in the first half of 2020.

UBS told the campaign groups in January that it had already declined “some crude oil transactions from the region” – despite making no firm commitments to cease such activity entirely.

Natixis was singled out as the only one of the six to have continued to finance crude in the second half of 2020.

But it was reported by GTR that the increase in volumes was linked to an existing customer drawing down larger amounts on an existing facility, and in the time since, Natixis has announced tougher measures.

A Natixis spokesperson told Reuters in April that it had amended its policy and would look to “significantly reduce” the volume of Ecuadorian crude it finances in 2021 and stop all financing by April 2022.

Less direct means of bank support for Amazon oil and gas companies and traders remain a concern for campaigners, however, with a July report from and Amazon Watch warning that revolving credit facilities (RCFs) and bond issuances are two potential weak spots in banks’ ever tightening sustainability policies.


Additional reporting from John Basquill