Venezuelan Signs $5 Billion China Loan for Lifting Oil Output

Venezuelan President Nicolas Maduro signed a $5 billion dollar loan from China to boost oil output and pledged to increase exports to his country’s largest creditor.

Despite dwindling production by state oil giant Petroleos de Venezuela SA, exports to China have risen steadily in recent years as Venezuela seeks to repay billions of dollars in loans from the world’s second-largest oil consumer. Much of the money owed is repaid through oil shipments, which currently stand at about 700,000 barrels a day, Maduro said at the signing ceremony in Beijing.

“We must complete the goal of 1 million barrels a day of oil that Comandante Hugo Chavez set for us,” he said, in a reference to his predecessor.

Venezuela has borrowed more than $45 billion from China over the past decade, using the funding for everything from farming to infrastructure and telecommunications projects.

Venezuela produced about 2.7 million barrels of oil a day last year, down from around 3.5 million in 1998, according to the BP Statistical Review of Energy.

The global downturn in oil prices has weighed heavily on Venezuela’s economy, plagued by the world’s highest inflation rate and rampant shortages of consumer staples. Maduro is touring Asia to shore up financial support and is set to meet his Russian counterpart, Vladimir Putin, this week in China to discuss oil prices.

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