Andes Petroleum Ecuador, the Modern Congruence between Global and Local

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Since 2006, Andes Petroleum Ecuador Ltd. has been operating in the Ecuadorian regions of Sucumbios, Orellana and Pastaza. One more fact: the CEO is called Zhang Xing, an unusual name in those parts.

So what was it that made this company stand out to win ISAQ International Star Award for Quality in 2009?

Business Initiative Directions noticed something unusual in the development of this enterprise: a good agreement between the foreign company and the government of Ecuador. A fair deal between the global and the local.

Andes Petroleum Ecuador was formed with contributions of state enterprises in the People’s Republic of China: China National Petroleum Corporation (CNPC) and China Petrochemical Corporation (SINOPEC), each owning 55 and 45 percent shares, respectively.

It took three years of negotiations to reach an agreement. The Ecuadorians proving hesitant to complete power of such a project to foreign companies. Matters of natural and cultural heritage were not taken lightly.

Communication had to be clear and honest. The benefits needed to be fair for both parties in the medium and long term.

Andes Petroleum clearly saw that oil exploitation without enough technological excellence could not provide positive results. Without proper means, the environment remains in the background and local communities end up being affected negatively.

For this reason they decided, along with other foreign companies, to offer an investment of $1,3 billion that would treat the ecosystem with the respect that it deserves. The same strategy aims to provide security to company employees as well.

Furthermore, the economic agreement is made as a service contract. The Chinese company operates by providing development and employment in the area and get benefits like external fees. It is not the holder of the heritage.

After this success story, Mr. Zhan Xing wanted to collect his award as an Ecuadorian himself. It’s a story of fraternity between two countries that have managed to complement well towards an excellent development project.

 

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