Venezuela says China investing $250 million to boost oil output

Bloomberg

Venezuela’s distressed oil sector may get some much needed financing from China, Finance Minister Simon Zerpa said after meetings with officials from China Development Bank and China National Petroleum Corporation.
China Development Bank will invest more than $250 million to boost Venezuela oil production in the Orinoco Belt, Zerpa, who is currently in Beijing for bilateral talks, said in a ministry statement.
“We’ve received the authorisation for a direct investment of more than $250 million from China Development Bank to increase PDVSA production, and we’re already putting together financing for a special loan that China’s government is granting Venezuela for $5 billion for direct investments in production,” Zerpa said. The two countries will sign an additional three or four financing deals in the coming weeks, he said.
Venezuela’s oil output averaged 2.9 million barrels a day in 2013, when President Nicolas Maduro was first elected. In June, output dropped to around 1.36 million barrels per day, according to International Energy Agency data. State oil company PDVSA has been struggling to send oil shipments to China after a legal order granted to ConocoPhillips froze its assets in Caribbean ports and terminals.
Maduro has vowed to boost production by 1 million additional barrels, while critics say output will plummet to 1 million barrels a day by the end of 2018.
Venezuela and China officials will continue meetings, the ministry said in its statement. Zerpa, who has served in the post since October, was sanctioned by the US Treasury Department before his appointment.
Meanwhile, oil is trading near levels last seen in 2014 as supply disruptions from Libya to Canada and Venezuela are seen outweighing output gains by the Organization of Petroleum Exporting Countries. Morgan Stanley raised its Brent crude forecast to $85 a barrel next year.
West Texas Intermediate crude for August delivery traded at $73.83 a barrel on the New York Mercantile Exchange, down 31 cents, at 9:02 am local time. Prices breached $75 for the first time since 2014. Total volume traded on Wednesday was 26 percent below the 100-day average.
Brent for September settlement was up 12 cents at $77.88 a barrel on the London-based ICE Futures Europe exchange, and traded at a $6.36 premium to WTI for the same month.
Saudi Arabia said it would “use its spare capacity when needed to deal with any future changes in oil supply and demand rates, in coordination with other producing countries,” according to a report by the Saudi Press Agency.
Earlier, the Saudi and Russian energy ministers reaffirmed their 1 million-barrel-a-day agreement reached last month in Vienna, after Trump tweeted over the weekend that he’d received assurances from the Middle Eastern nation that it could increase production by double that volume.