Special Report: How China took control of an OPEC country's oil

[Zorro]

China's aggressive quest for foreign oil has reached a new milestone, according to records reviewed by Reuters: near monopoly control of crude exports from an OPEC nation, Ecuador.

Last November, Marco Calvopiña, the general manager of Ecuador's state oil company PetroEcuador, was dispatched to China to help secure $2 billion in financing for his government. Negotiations, which included committing to sell millions of barrels of Ecuador's oil to Chinese state-run firms through 2020, dragged on for days. Calvopiña grew anxious and threatened to leave.

"If the Phase III transaction documents are not signed in the coming days, then I cannot remain in Beijing," he wrote in a confidential letter to China Development Bank (CDB), reviewed by Reuters.

In reality, Calvopiña had little choice but to wait. Shunned by most lenders since a $3.2 billion debt default in 2008, Ecuador now relies heavily on Chinese funds, which are expected to cover 61 percent of the government's $6.2 billion in financing needs this year. In return, China can claim as much as 90 percent of Ecuador's oil shipments in coming years, a rare feat in today's diversified oil market.

http://news.yahoo.com/special-report-china-took-control-opec-countrys-oil-120306489--finance.html

[Flatulo]

1. China plays the long game, and they play it well. In addition to taking defacto control of an

ever-increasing share of the world's petroleum reserves, they're also gobbling up raw materials used in alternative energy, such as neodymium, a rare earth used in making the powerful magnets used in wind turbine generators.