Venezuela to tap US$2.2b China credit line

CARACAS: Venezuela said it would tap US$2.2 billion (RM9.7 billion) from a Chinese credit line to boost oil output at joint ventures with China National Petroleum Corp (CNPC), in a boost for the South American country’s struggling oil industry and a show of unity with a key ally.

CNPC, China’s largest state energy group, and Venezuela’s state oil company PDVSA would seek to boost production in the Organisation of the Petroleum Exporting Countries (Opec) country by around 277,000 barrels per day (bpd), said President Nicolas Maduro.

Funds would come from an up to US$9 billion credit line with China, said Maduro after a meeting with CNPC, here, on Thursday.

The agreement will be a boon to Venezuela’s oil industry, which has seen its production tumble this year amid a steep recession. It is also welcome public backing for Maduro from a strategic ally amid a political and economic crisis.

“Many thanks for all the support you have given Venezuela in 2014, last year and especially this year,” said Maduro in a televised speech. “Our older sister China has not left Venezuela alone in moments of difficulty.”

Venezuela has borrowed over US$50 billion from China under a financing arrangement created by late socialist leader Hugo Chavez in 2007, in which a portion of its crude and fuel sales to the world’s secondbiggest economy are used to pay down loans.

The increased oil output at the joint ventures would boost shipments to China to more than 800,000 bpd, said the president. Reuters