Maduro negotiating with China massive emergency loan
ANTONIO MARIA DELGADO
ADELGADO@ELNUEVOHERALD.COM
01/05/2015 8:18 PM
01/05/2015 9:39 PM
Story
The regime Nicolas Maduro is negotiating with the Chinese government a massive emergency loan to try to offset the impact of the drastic fall in oil prices this year, according to information obtained by analysis firm Inter American Trends.
The loan, to be repaid with future supply of oil could reach $ 16,000 million and the final terms will be discussed this week by Maduro, who arrived Monday in Beijing.
According to information obtained by Inter American Trends of people close to the negotiations, remain to be agreed some of the guarantees being demanded by the Chinese government to make the loan, which South American country urgently needs before the apparent collapse of their finances.
"The Chinese are demanding harsh conditions. They are demanding more oil than it had offered. But if Maduro satisfies the conditions required by the Chinese, he is most likely to be given the money, "said Antonio De La Cruz, executive director of Inter American Trends.
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The emergency loan, however, would be very bad news for countries receiving aid through Petrocaribe, given that the regime Maduro could be forced to use oil intended for that program to pay the new Chinese loan warned De La Cruz.
Depending on the future development of oil prices and the interest rate to be applied, a loan of that size would require Venezuela shipments to China increased by more than 100,000 barrels per day, and the inability of the South American country to increase production coupled the high cost involved Petrocaribe generate serious doubts about the sustainability of the program, explained De La Cruz.
"If concrete [the loan], that could end up killing Petrocaribe. That could give to Venezuela between 50,000 and 70,000 barrels per day of production, and the rest will be obtained by suspending sales to India and other small customers ".
The Beijing government, which took several months resisting recurring orders for financial support made from Caracas, and has extensive investments in Venezuela.
According to figures from the regime in Caracas, loans from China to Venezuela totaling more than $ 46,000 million and include a loan of $ 10,000 million secured by future oil supply that gave the late President Hugo Chavez in 2010.
Maduro's situation in 2015, however, is much more difficult. The current leader of the Bolivarian revolution faces extreme problems of political instability and what is seen as an unprecedented economic crisis.
M. Russell Dallen, president and chief editor of the publication Latin American Herald Tribune said the economic situation in Venezuela is "desperate".
Once the domestic consumption of oil that is virtually free in Venezuela, where fill a gas tank costs less than 25 cents on the dollar is discounted, shipments to PetroCaribe and Cuba, and offices already under way to China 450,000 barrels that are to repay loans that were already granted, Venezuela has only 1.3 million barrels to sell, broken down Dallen.
But even raising that amount to 1.5 million in order to make a conservative estimate, and the average price goes up to $ 50 a barrel from the current $ 45, revenue forecasts for the country only amount to $ 27,000 million this year, Dallen said from Caracas.
"That's not enough," said Dallen. "This year, Venezuela will have to pay a debt service of approximately $ 11.000 million. But besides that you also have to pay for imports, and almost everything that is consumed here is imported. "
Imports from two years totaled $ 44.000 billion and 2014 were roughly in the order of $ 36,000 million, which meant great product shortages of all kinds, said.
"This is a huge deficit that a Chinese loan, say $ 5,000 million, would do nothing to cover. It would need much more, "he said.
To this total must be subtracted the costs of suppliers and oil companies operating in Venezuela, together with PDVSA, which are part of production costs and further reduce the calculation of $ 27.000 million this year.
In addition to this, Venezuela to $ 4.000 million international airlines operating in the country, $ 1.700 million to Exxon Mobil, after the International Centre for Settlement of Investment Disputes (ICSID) ruled in favor of the oil in the dispute wearing against the regime in Caracas, and at least $ 4.500 million for the judgment Conocophillips could receive this year in his favor for the same concept.
"They have very serious problems over," he reiterated.
Antonio María Delgado Follow on Twitter: DelgadoAntonioM
Read more here: http://www.elnuevoherald.com/noticias/mundo/america-latina/venezuela-es/article5470398.html#storylink=cpy
ANTONIO MARIA DELGADO
ADELGADO@ELNUEVOHERALD.COM
01/05/2015 8:18 PM
01/05/2015 9:39 PM
Story
The regime Nicolas Maduro is negotiating with the Chinese government a massive emergency loan to try to offset the impact of the drastic fall in oil prices this year, according to information obtained by analysis firm Inter American Trends.
The loan, to be repaid with future supply of oil could reach $ 16,000 million and the final terms will be discussed this week by Maduro, who arrived Monday in Beijing.
According to information obtained by Inter American Trends of people close to the negotiations, remain to be agreed some of the guarantees being demanded by the Chinese government to make the loan, which South American country urgently needs before the apparent collapse of their finances.
"The Chinese are demanding harsh conditions. They are demanding more oil than it had offered. But if Maduro satisfies the conditions required by the Chinese, he is most likely to be given the money, "said Antonio De La Cruz, executive director of Inter American Trends.
Diosdado Cabello Chavez reelected as president of the National Assembly[/paste:font]
Venezuelan crude closed 2014 at $ 88.42 and $ 47.05 2015 begins
Maduro said that "only way" to release opposition Leopoldo Lopez is canjeándolo
Venezuelan President stops in Russia in touring China and OPEC countries
The emergency loan, however, would be very bad news for countries receiving aid through Petrocaribe, given that the regime Maduro could be forced to use oil intended for that program to pay the new Chinese loan warned De La Cruz.
Depending on the future development of oil prices and the interest rate to be applied, a loan of that size would require Venezuela shipments to China increased by more than 100,000 barrels per day, and the inability of the South American country to increase production coupled the high cost involved Petrocaribe generate serious doubts about the sustainability of the program, explained De La Cruz.
"If concrete [the loan], that could end up killing Petrocaribe. That could give to Venezuela between 50,000 and 70,000 barrels per day of production, and the rest will be obtained by suspending sales to India and other small customers ".
The Beijing government, which took several months resisting recurring orders for financial support made from Caracas, and has extensive investments in Venezuela.
According to figures from the regime in Caracas, loans from China to Venezuela totaling more than $ 46,000 million and include a loan of $ 10,000 million secured by future oil supply that gave the late President Hugo Chavez in 2010.
Maduro's situation in 2015, however, is much more difficult. The current leader of the Bolivarian revolution faces extreme problems of political instability and what is seen as an unprecedented economic crisis.
M. Russell Dallen, president and chief editor of the publication Latin American Herald Tribune said the economic situation in Venezuela is "desperate".
Once the domestic consumption of oil that is virtually free in Venezuela, where fill a gas tank costs less than 25 cents on the dollar is discounted, shipments to PetroCaribe and Cuba, and offices already under way to China 450,000 barrels that are to repay loans that were already granted, Venezuela has only 1.3 million barrels to sell, broken down Dallen.
But even raising that amount to 1.5 million in order to make a conservative estimate, and the average price goes up to $ 50 a barrel from the current $ 45, revenue forecasts for the country only amount to $ 27,000 million this year, Dallen said from Caracas.
"That's not enough," said Dallen. "This year, Venezuela will have to pay a debt service of approximately $ 11.000 million. But besides that you also have to pay for imports, and almost everything that is consumed here is imported. "
Imports from two years totaled $ 44.000 billion and 2014 were roughly in the order of $ 36,000 million, which meant great product shortages of all kinds, said.
"This is a huge deficit that a Chinese loan, say $ 5,000 million, would do nothing to cover. It would need much more, "he said.
To this total must be subtracted the costs of suppliers and oil companies operating in Venezuela, together with PDVSA, which are part of production costs and further reduce the calculation of $ 27.000 million this year.
In addition to this, Venezuela to $ 4.000 million international airlines operating in the country, $ 1.700 million to Exxon Mobil, after the International Centre for Settlement of Investment Disputes (ICSID) ruled in favor of the oil in the dispute wearing against the regime in Caracas, and at least $ 4.500 million for the judgment Conocophillips could receive this year in his favor for the same concept.
"They have very serious problems over," he reiterated.
Antonio María Delgado Follow on Twitter: DelgadoAntonioM
Read more here: http://www.elnuevoherald.com/noticias/mundo/america-latina/venezuela-es/article5470398.html#storylink=cpy
