Venezuela’s ailing oil sector may receive a welcome boost through investment from China, according to a report from Bloomberg.
After officials from China National Petroleum Corporation and China Development Bank held talks, Venezuela’s Finance Minister Simon Zerpa said:
“We’ve received the authorization for a direct investment of more than $250 million from China Development Bank to increase PDVSA production, and we’re already putting together financing for a special loan that China’s government is granting Venezuela for $5 billion for direct investments in production.”
The $250 million investment from China Development Bank will be used to increase the country’s oil production in the Orinoco Belt. Zerpa also said that the coming weeks will see Venezuela and China agree three or more financing deals.
The new investment may bring some welcome relief to Venezuela’s oil production, which has dropped dramatically since the election of President Nicolas Maduro in 2013, when it stood at 2.9 million bpd (barrels per day). In June, data from the International Energy Agency showed the country’s oil production had dropped to approximately 1.36 million bpd. What’s more, the country’s state-owned oil company, PDVSA, has experienced difficulty in getting oil shipments to China following an order that saw its assets frozen in Caribbean terminals and ports.
Some analysts predict the country’s oil production may even drop below a million bpd by the close of this year, despite a pledge from President Maduro to increase it by a million bpd.