State-owned PetroChina is negotiating with Ecuador for future oil purchases of 96,000 barrels per day over two years, in a move to diversify its oil import sources.

PetroChina is talking with the South American country for an advance payment of $1 billion for the future oil purchases, Diego Borja, minister of economic policy coordination of Ecuador, told Dow Jones.

As part of the negotiations, Ecuador is asking that China uses the crude oil for final consumption and doesn't sell it to Peru or Chile as that would distort the market, Borja said.

However, PetroChina could resell it elsewhere, he added.

A PetroChina spokesman yesterday declined to comment on the report, but said the company was currently taking part in some oil and gas projects in Ecuador.

Analysts said the move was in line with China's continuous efforts to diversify its oil imports to find more sustainable supply.

At present, the Middle East, Africa and Asia-Pacific were the three main oil-exporting regions for China.

"In order to meet rising domestic demand, China should eye other regions such as South America," said Han Xiaoping, a veteran energy analyst based in Beijing.

PetroChina has been present in Ecuador since 2003 and now operates two projects in the country. It also provides oilfield services.

In 2003 PetroChina took over an oil block in eastern Ecuador from Petroecuador, and started oil and gas exploration and development in this block. In 2005, PetroChina and Sinopec jointly purchased oil and gas assets from Encana in Ecuador, and established Andes Petroleum Ecuador Ltd, with CNPC holding a 55 percent share.