The state oil companies Petroecuador and Petroperu signed on Friday a strategic alliance agreement for fossil fuel exploration, exploitation, transportion, storage, industrialization and trade, Petroecuador said on Friday.

Ecuador's President Rafael Correa and Peru's President Alan Garcia witnessed the agreement's signing in the Peruvian city of Tumbes.

The presidents of Petroecuador, Carlos Pareja, and of Petroperu, Cesar Gutierrez, signed a joint declaration, under which the two sides would hold talks on supplying some 14,000 barrels of Ecuadoran crude Oriente daily in a long-term contract.

Petroecuador said in a statement that all the local fossil fuel negotiated will be used in Petroperu's refineries and part of the products, like nafta used in Ecuador to produce high octane gasoline, will be sold to Petroecuador with preferential prices.

The strategic alliance also commits both state oil companies to form an executive committee within 10 days and a joint work team to pinpoint the main mutual interest projects.