Related Articles
Forward article link
Share PDF with colleagues

Venezuela: China secures long-term oil supply, Chávez secures finance

"CHINA needs energy security and we're here to provide them with all the oil they need," said Venezuela's president Hugo Chávez last month. His country also needs cash. So a new oil-for-loans deal signed with Chinese state-owned China National Petroleum Corporation (CNPC) is a good fit

The agreement will see China's development bank loan Venezuela $20bn and CNPC take a minority stake in a $16bn project to develop the heavy-oil Junin 4 block, in the Orinoco basin. Production should amount to 400,000 barrels a day (b/d) by 2016. CNPC will also pay PdV, Venezuela's national oil company, which will hold 60% of the joint venture, a $0.9bn signature bonus. Chávez described the deal as a "super-heavy fund". It is also a long-term one, signalling once again China's ability to use its financial clout to secure the big contracts that guarantee its energy supplies. The agreement for Junin 4 will last for 25 years, giving Venezuela plenty of time to repay the loan through oil shipmen

Also in this section
Nigeria's election hangs over energy sector
19 April 2018
Africa's biggest economy is growing again. But next year's vote is stalling reform and investment in its crucial energy sector
Syria: ruthless business as usual
18 April 2018
The joint US-UK-French strikes on chemicals targets in Syria won’t affect the war—but they could damage Trump's image in the region
Elections a new rupture point in Venezuela crisis
16 April 2018
A Maduro loss in May's election could be a turning point, but recovery will be lengthy