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China agrees to improve oil-for-loan-deal conditions

Reporter: Xu Zhen 丨 CCTV.com

05-17-2016 11:38 BJT

Venezuela has reached a deal with China to improve the conditions of an oil-for-loans deal, according to the country’s top economic official.

The move has given the oil exporter a breather ahead of heavy debt payments. Venezuelan Economy Vice-President Miguel Perez said that all conditions, including loan time frames, investment amounts and non-financial aspects, had been improved.

“We have produced favorable agreements for the Republic with China, under the conditions experienced by the nation, with regards to falling oil revenues, they have been quite receptive to the proposal and today we can say that we’ve agreed to new commercial conditions that are adapted to the country’s reality,” said Perez.

“We have created new conditions both for domestic producers, we are talking about financing, funds for exporters. We have produced agreements with regards to dealing with the debt between our Republic and our national and international suppliers, they have sought funding sources.”

China has lent some U.S.$50 billion to Venezuela in that arrangement over the last decade. The improved China deal, as well as a steep cut to imports and a new, weaker foreign exchange rate, would help Venezuela mitigate its economic trouble. But Perez said the economy is likely to remain in recession until the end of 2017.

The dire economic situation has led to concerns that the country’s state oil company PDVSA could default on its heavy debt load. Perez reiterated that all debt commitments would be honored and that any refinancing of PDVSA debt would be “very positive” for bondholders.

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