China Petroleum Must Pay Venezuela $900 Million to Tap Junin 4 Oil Block
China National Petroleum Corp., the country’s largest energy company, must pay a $900 million signing bonus to develop the Junin 4 oil block in Venezuela, Oil Minister Rafael Ramirez said.
The bonus will be paid in several installments and is in addition to capital needed to produce and refine crude at the Orinoco Belt field, Ramirez said today. State-run Petroleos de Venezuela SA and CNPC signed an accord on April 17 to invest $16.3 billion in a joint venture that will produce 400,000 barrels a day in 2016. CNPC will be a minority partner.
China will also provide a 10-year, $20 billion credit line for development projects in Venezuela to be repaid with future oil shipments. Since 2007, Caracas-based PDVSA has exported about 460,000 barrels of oil a day to China to repay $8 billion in loans for Venezuelan infrastructure projects.
“This is a very important agreement we’ve reached that will be used for projects with Venezuelan and Chinese companies,” Ramirez told reporters today in Caracas. “This is a loan with extraordinary conditions.”
Ramirez declined to say whether the $20 billion loan would be used to partly finance the development of Junin 4. Venezuela has signed ventures with Chevron Corp., Repsol YPF SA, OAO Gazprom, OAO Lukoil and Eni SpA this year to pump and refine Orinoco heavy crude reserves.
Venezuela expects about $80 billion of investments to boost crude output by almost 2 million barrels a day.
PDVSA also is evaluating proposals to develop the Carabobo 2 field, which the company failed to award earlier this year, Ramirez said, without citing potential partners.
The oil company posted an $8 billion profit in 2009, Ramirez said, and is in talks with unspecified banks to secure a $1.5 billion loan. Full-year profit dropped 15 percent from $9.4 billion in 2008, according to a statement on PDVSA’s Web site.
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