China has agreed to pay Ecuador one billion dollars in August as part of a deal to supply the energy-thirsty Asian giant with crude oil.

State-run Petroecuador said a deal inked on Thursday committed Beijing to pay the sum next month, a payment worth 28 percent of the total contract.

Under the deal China will receive millions of barrels of oil over two years.

Ecuador is OPEC's smallest-producing member, pumping out around 500,000 barrels of crude a day.