Venezuela just mortgaged another $4 billion of its oil exports to China

[Bacchus4.0]

http://qz.com/239106/venezuela-just-mortgaged-another-4-billion-of-its-oil-exports-to-china/

Chinese president Xi Jinping pledged $4 billion in loans to Venezuela while visiting president Nicolás Maduro this week. The agreement will raise Caracas’s existing debts to Beijing by almost 25%, to over $20 billion—money that the country may find it increasingly difficult to repay.
China has lent its South American partner more than $40 billion since 2008 to help Caracas shore up its ailing economy, which is expected to slip into a recession this year and has suffered from shortages ranging from medicine to toilet paper. Venezuela has been paying that money back mostly with oil, but that is getting harder to do.


Every day, about 500,000 barrels of Venezuelan oil are exported to China, half of which go to pay off the country’s loans from Beijing. As of last month, outstanding debt totaled $17 billion, according to Venezuela’s vice president for the economy. The Maduro administration plans to pay off the additional loans by producing and exporting more oil—an additional 100,000 barrels (paywall) a day. Venezuela sits on the world’s largest proven oil reserves.
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“Sales to China may be increasing,” Fernando Sanchez, vice president of the Society of Venezuelan Petroleum Engineers told Bloomberg that same month. “But the company doesn’t earn money from them. The US is where they sell oil for money.”