China once again raised its ownership stake in the OPEC (Organization of Petroleum Exporting Countries) nation's oil industry as it signed yet another set of funding deals in Venezuela's energy sector. Meanwhile, Caracas confirmed that Beijing has agreed to extend USD$5 billion credit line to the cash-strapped Latin American nation, a tell-tale sign that President Nicolas Maduro's Asian business trip has been successful.
Last week, this site first reported Maduro's visit to China to discuss economic agreements and sought out business opportunities with the Asian powerhouse.
An update from Reuters indicated that Maduro's trip has bear fruits such that the LatAm country has once again sold a hefty percentage share of its oil industry to the world's second-largest economy.
As pointed out by the news outlet, Venezuela has successfully transferred another 9.9 percent stake in the Sinovensa joint venture to Beijing. This makes China National Petroleum Corporation, China's own petrol firm, owner of the project by a 40 percent share.
Moreover, China and Venezuela signed a memorandum of cooperation to explore fossil energy resources in Ayacucho bloc 6, which is located in Venezuela's Orinoco Belt - an oil-rich basin.
This agreement will give Beijing the rights to drill up to 300 oil wells in the said location while extending a total of USD$184 million as funding for another joint oil venture with Petrozumano.
A person claiming knowledge of the matter said that oil procurement and services at Sinovensa, a Venezuelan petroleum company, will be turned over to its Chinese counterpart firms.
It remains to be seen what China will get in return with this deal given that it has already poured more than USD$50 billion as oil-for-loan agreements to the Venezuelan oil venture, this report said.
A New Credit Line
Once again, China strengthened its economic ties with the Maduro government as evidence in its decision to extend a multi-billion credit line to help the crisis-held country get back on its feet.
In a report from the St. Lucia News, Venezuelan finance minister, Simon Zerpa, has confirmed to Bloomberg that the Maduro administration has agreed to repay the loan either in cash or in oil.
Citing data from a consulting firm based in Caracas, it was found out that China has lent Venezuela a total of USD$70 billion since 2008 where it came in several forms of installment.
Aside from the cash grant, the two countries have also reportedly signed a deal marking a strategic alliance between the involved parties in a certain gold mining operation, Zerpa added.
