MARACAIBO: Venezuela will receive a loan of $5 billion from China in the coming months for crude oil projects, a director at state-owned Petroleos de Venezuela said on Tuesday.
China has become Venezuela’s principal financier over the last decade, lending more than $46 billion to be repaid in oil.
“It is being discussed right now and will come within a few months,” Orlando Chacin, vice president of exploration and production at PDVSA [PDVSA.UL], said in an interview.
The resources should help the oil company as it handles the severe impact of the drop in crude prices.
Oil makes up 96 percent of the country’s foreign income.
The funds seemed to be part of an overall $10 billion loan a PDVSA source earlier this year said Venezuela had negotiated with the Development Bank of China, half for oil projects.
“They are for many projects,” Chacin said. He said many of those would be in the vast Orinoco Belt, which contains most of Venezuela’s crude, but did not offer more details.
Venezuela is looking to increase crude production in the Orinoco region to offset declines in other traditional areas and to stimulate its struggling economy.
The country’s international reserves hit 12-year lows this month as the economy suffers a recession, high inflation and shortages of basic goods.
