Beijing inks 5bn loan deal to boost Venezuela's oil output

Sep 02, 2015 12:00 AM

Venezuela and China have signed a deal for a 5 billion loan designed to increase the OPEC country's oil production Venezuelan President Nicolas Maduro said.

Maduro speaking from China in a program broadcast on Venezuelan state television late on Tuesday said the loan was destined "to increase oil production in a gradual way in coming months" without providing further details.

A source at Venezuelan state-run oil company PDVSA told in March that China was set to extend a "special" 5 billion loan that would likely stipulate hiring Chinese companies to boost output in the company's mature oil fields.

Venezuela has borrowed 50 billion from China through an oil-for-loans agreement created by late socialist leader Hugo Chavez in 2007 which has helped Chinese companies expand into Venezuelan markets amid chronic shortages of consumer goods there.

That financing has been especially crucial for Caracas since last year's oil market rout which aggravated the country's severe economic crisis.

Eulogio del Pino the oil minister and president of PDVSA and Finance Minister Rodolfo Marco Torres were among key Venezuelan figures present at the president's "In Contact with Maduro" show which broadcast this week from Beijing.

Speaking in front of a huge portrait of Chavez Maduro also said that Venezuela currently sends about 700000 barrels-per-day of oil to the Asian giant.

Chinese Foreign Ministry spokeswoman Hua Chunying would not confirm whether China had indeed agreed to the loan.

"We believe China's cooperation including financial cooperation with countries including Venezuela is done on the basis of realizing mutually beneficial goals and will contribute to economic and social development in the relevant countries and places" she told a daily news briefing.

Chinese President Xi Jinping told Maduro that China was willing to look at new areas of financial cooperation according to the Chinese government's account of the meeting.

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