Jose Ignacio (Uruguay), March 4 (IANS/EFE) Ecuadorian President Rafael Correa visited this Uruguayan port town for the launch of an oil-for-petrol swap between the two countries's respective energy companies, a programme he described as a step toward regional integration.

During Tuesday's inauguration ceremony at Uruguayan state-owned Ancap's oil terminal in Jose Ignacio, some 180 km east of Montevideo, Correa witnessed the arrival of the first of seven Ecuadorian crude shipments due over the next several months.

Under the terms of the agreement, Petroecuador will supply Uruguay with 360,000 barrels of crude for which it lacks refining capacity, while in exchange Ancap will provide Ecuador an equal amount of petrol.

The goal of the evolving accord is to complement each country's different capabilities and seek mutual benefit, Correa told a press conference.

The Ecuadorian president's visit to Uruguay followed his attendance at Monday's inauguration of leftist Jose Mujica as this country's new head of state.

Correa said the barter agreement between Ecuador and Uruguay will not only save money but also promote 'financial and monetary sovereignty'.

'Ecuador produces oil but does not have refining capacity and we were falling into the serious mistake of exporting crude - selling it to intermediaries which sold it at a high price to Uruguay - so that we could buy refined products from the same intermediary,' he said.

'We were giving the money away to transnational intermediaries,' the US-trained economist said.

Under the barter system, with just the first 360,000 barrels that is exchanged, the cost savings for Uruguay - which imports all the oil it consumes - and Ecuador will be $25 million, Correa said.

But he said the biggest benefit for the countries is the boost it will give to 'regional planning'.

'If Uruguay has refining capacity and needs crude, and Ecuador has oil and needs petrol, we need to coordinate and overcome the ridiculous notion they've imposed on us that countries have to compete,' the leftist president said.

--IANS/EFE

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