Venezuela’s Maduro secures another $5 billion loan from China for oil sector

CARACAS, Venezuela – Venezuelan President Nicolás Maduro announced China has granted his government a $5 billion loan to boost oil output in the recession-hit OPEC state.

“We have signed a special program for a $5 billion loan to progressively increase oil production in the coming months,” Maduro said on state television Tuesday night in a broadcast from China, where he is on a visit seeking support for Venezuela’s sinking economy.

The two countries will negotiate “joint projects in the areas of reconnecting oil wells and services associated with crude production,” the socialist leader said.

China, a major political and economic ally, also agreed to a gold mining deal and a joint development plan through 2025, he added.

Maduro traveled on Aug. 29 to China and Vietnam, saying the trip was aimed at “seeking support in these difficult times.” His cash-strapped government already had secured a $5 billion loan from China in April.

Venezuela’s state oil giant, PDVSA, the engine of the economy, saw output fall by 4 percent last year, to 2.78 million barrels a day.

The slide in global oil prices — down from around $120 a barrel in June last year to less than $50 now — has exacerbated the crisis gripping Venezuela’s economy, hit by runaway inflation, shrinking reserves and severe shortages of basic goods.

Venezuela, which has the world’s largest proven oil reserves, has borrowed more than $50 billion from China in an oil-for-loans deal struck by Maduro’s late mentor, Hugo Chávez in 2007.