Exclusive: Venezuela seeks $4 billion China loan, $2 billion Chevron credit - sources

Fri Feb 1, 2013 12:57pm EST
 

By Marianna Parraga

CARACAS (Reuters) - Venezuela's government and state oil company PDVSA are in urgent talks over a long-expected $6 billion in loans from China and U.S. energy giant Chevron that would help relieve the nation's strained finances, sources close to the discussions said.

Oil Minister Rafael Ramirez said this week that PDVSA had no plans to issue any more dollar-denominated bonds, confounding widespread speculation that one was planned to address a chronic shortage of dollars for local businesses.

That has left the government in the OPEC member seeking other forms of financing, amid pressure to order a devaluation of its currency that would ease the pressure on its cash flow by providing more bolivars for every dollar of oil sales.

Its top priority is a deal agreed last year with China Development Bank for a $4 billion loan this year.

Venezuela has borrowed $36 billion from China in recent years - repaid with oil shipments - making Beijing the single biggest foreign source of funding for the country's socialist government, according to finance ministry data.

But a source close to the talks told Reuters that the Chinese team wanted to toughen the terms of the deal.

"The Chinese have introduced a clause that the Venezuela team decided to reject," the source said, without describing the proposed change. "That was holding things up until recently, but they are coming to an agreement on the amendment."

Meanwhile, a PDVSA team is negotiating a private loan of $2 billion with U.S. oil company Chevron (CVX.N: Quote), the source said, adding that the proposed credit is intended to be used to increase crude production at the two companies' joint venture, Petroboscan, in western Venezuela.   Continued...

 
Workers stand in front of a drilling rig at an oil well operated by Venezuela's state oil company PDVSA in Morichal July 28, 2011. REUTERS/Carlos Garcia Rawlins