It has been reported that China is in the process of extending loans to Venezuela. China might be financing the South American nation to secure some of its oil supplies and putting itself n position for available drilling projects. China’s ties with Venezuela have grown increasingly warm in recent years, marked by rising Venezuelan oil exports to China, the Chinese launching of a satellite for Venezuela and the sale of Chinese military aircraft to Venezuela.
If the loans do go through, they could give Chavez a much needed cash advance. The country is facing a cash flow crisis because of low oil revenues. The linchpin of the loans appears to be China’s thirst for oil, with the China National Petroleum Corporation, or C.N.P.C., agreeing to form a venture with Venezuela’s national oil company to explore for oil in southern Venezuela. Eventually the companies could produce 400,000 barrels a day in the area. Venezuela’s energy minister, Rafael RamÃrez, said C.N.P.C. would need to pay $1 billion to move the venture forward. Venezuela has been reaching out to other nations and big energy companies, including Chevron in the U.S., auctioning off exploration contracts in exchange for cash. One of those potential bidders is an Iranian company. This current deal with China is pending and the exact details are unknown.
If the loans do go through, they could give Chavez a much needed cash advance. The country is facing a cash flow crisis because of low oil revenues. The linchpin of the loans appears to be China’s thirst for oil, with the China National Petroleum Corporation, or C.N.P.C., agreeing to form a venture with Venezuela’s national oil company to explore for oil in southern Venezuela. Eventually the companies could produce 400,000 barrels a day in the area. Venezuela’s energy minister, Rafael RamÃrez, said C.N.P.C. would need to pay $1 billion to move the venture forward. Venezuela has been reaching out to other nations and big energy companies, including Chevron in the U.S., auctioning off exploration contracts in exchange for cash. One of those potential bidders is an Iranian company. This current deal with China is pending and the exact details are unknown.
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