Venezuela, China May Sign New Loan-for-Oil Accord, Chavez Says [Dollar]

Hellenic shipping news ^ | 03 July 2009

[Vince Ferrer]

Venezuela and China Development Bank Corp. are discussing a third $4 billion infrastructure loan to be paid in oil, President Hugo Chavez said. “This bank is the one with the most money in the world,” Chavez said late yesterday on state television. “It has half the money in the world and is allied with Venezuela.” Chavez is seeking closer ties with developing nations such as China, Russia, India and Brazil to reduce dependence on the U.S., which consumes more than half of Venezuela’s oil exports.

China previously made two $4 billion loans to finance infrastructure projects in Venezuela. Venezuela’s government repays the loan with as much as 230,000 barrels a day of oil provided to China National Petroleum Corp., according to the annual report of Petroleos de Venezuela SA, also known as PDVSA. China, the world’s second-biggest energy user, has signed loan-for-oil agreements with countries including Russia, Brazil and Kazakhstan this year, tapping its $1.95 trillion foreign- exchange reserves to buy assets after oil’s 55 percent decline from July’s record. Russian and Iranian officials have arrived in the southern state of Guayana to study “one of the biggest gold mines in the world” and create a joint venture, Chavez said separately. He said in January he wanted the Las Cristinas deposit, licensed to Crystallex International Corp., to be developed by a joint venture with Russian companies.

[Vince Ferrer]

China, the world’s second-biggest energy user, has signed loan-for-oil agreements with countries including Russia, Brazil and Kazakhstan this year, tapping its $1.95 trillion foreign- exchange reserves to buy assets after oil’s 55 percent decline from July’s record.

They want to loan in US dollars, but get something, anything else back in return.