New oil fund commitments obtained from China, says Venezuela's Maduro

Caracas

VENEZUELAN President Nicolas Maduro said on Saturday that he had new commitments from Beijing on funding for the oil industry on which crisis-hit Caracas relies.

Oil output is the main generator of Venezuela's income but has fallen to its lowest level in three decades, with the South American country's state-led economy in free-fall.

Analysts blame years of neglect during which state oil firm PDVSA's infrastructure became rundown and exploration was curbed, while oil revenues were used to plug the fiscal deficit.

Now, however, "there are financing commitments to increase oil production, gold production as well as investment in more than 500 development projects within Venezuela", Mr Maduro told Venezuelan state television VTV from China, his country's main creditor.

He began a visit on Friday seeking Beijing's help for the collapsed economy. Mr Maduro was received by Chinese President Xi Jinping and attended meetings at the China Development Bank and the China National Petroleum Corporation.

Venezuela - which has received more than US$50 billion in credit from Beijing - still owes about US$20 billion dollars and has been repaying the debt with oil shipments. Conditions on that credit were made more flexible in 2016.

Mr Maduro did not say if the debt was discussed, or whether China has offered a new loan of US$5 billion.

Venezuelan consultancy Ecoanalitica had said Mr Maduro may return home with a fresh US$5 billion loan and a six-month extension to the grace period to service its debt.

Venezuela and its state oil company PDVSA were declared in partial default in 2017 for the non-payment of bond debts.

On Friday, the president signed memorandums of understanding on energy and mining deals, which he said were worth several billion dollars.

Venezuela's crude oil production - which accounts for 96 per cent of income - fell in August to 1.4 million barrels per day, the lowest level in three decades except for a period between 2002 and 2003, according to the Organization of the Petroleum Exporting Countries (Opec).

Mr Maduro's government has massively devalued the national currency as part of a raft of measures intended to halt the economy's collapse and hyperinflation which the International Monetary Fund projects will reach 1,000,000 per cent by the end of the year.

More than 1.6 million Venezuelans - facing shortages of food and medicine at home - have left their country since 2015, mostly for neighbouring Latin American countries.

In Caracas on Saturday, Vice-President Delcy Rodriguez said her government planned to "denounce before the United Nations" remarks made by Organization of American States chief Luis Almagro. On Friday Mr Almagro cited the "suffering" of Venezuelans and said "a military intervention" to overthrow the Maduro regime should not be ruled out. AFP