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China loans Venezuela $5B to boost oil output

Lucy Nicholson | Reuters

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 show broadcast on Venezuelan state television on Tuesday night, said the loan was destined "to increase oil production in a gradual way in coming months," without providing further details.

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A source at Venezuelan state-run oil company PDVSA told Reuters 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.

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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 around 700,000 barrels-per-day of oil to the Asian giant.

During the show, which usually lasts for hours and often includes live music and folkloric dance, Maduro lauded traditional Chinese medicine and art.