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Venezuela gets US$5b loan from China in exchange for oil

Published:Friday | September 4, 2015 | 9:00 AM
President of Venezuela, Nicolas Maduro

Venezuelan President Nicol·s Maduro says China has agreed to provide a US$5-billion loan to boost oil production.

Maduro said Tuesday night during a speech broadcasted from Beijing that the loan would be paid back in oil shipments.

China is Venezuela's largest creditor and has loaned it more than US$40 billion during the last five years, much of which has been paid back with oil. Venezuela sells China more than 600,000 barrels of oil a day.

The socialist South American country is struggling with a recession and a cash crunch brought about in part by a steep drop in the price of oil, which makes up 95 per cent of Venezuela's export earnings.

China has continued to loan Venezuela money as the country's economy struggles and some fear default.

It is not clear if the money is new financing or part of a deal announced earlier.