Caracas, April 26th 2012 (Venezuelanalysis.com) – The Venezuelan government has secured a loan of US$ 1 billion from Japan in order to further expand one if its oil refineries in the Northern state of Carabobo, as well as to finance oil related goods and services.
The deal was announced by Venezuelan Energy and Petroleum Minister Rafael Ramírez earlier this week after he travelled to Tokyo to meet with Japanese officials as part of the two countries’ Fourth Managerial Committee Meeting for Energy Cooperation on April 23rd and 24th.
“We want the economies of Japan and Venezuela to complement each other, the relationship between both nations has reached an excellent level,” said Ramirez during the meeting.
According to Venezuelan state oil company PDVSA, which will be the main recipient of the loan, Japan’s International Cooperation Bank (JBIC) will provide the majority of the US$1 billion, with the rest being financed by a conglomerate of Japanese companies.
The Venezuelan government has confirmed that US$800 million will be used to improve and increase output at the El Palito PDVSA refinery in Carabobo state, while US$200 million will go towards the purchase of oil related goods and services.
The two countries also discussed the possibility of Venezuela sending natural gas to the Asian country, as well as the management of their joint oil-extraction projects in Venezuela’s Orinoco belt, established in 2009 between PDVSA, Japan’s national oil, gas, and metals corporation JOGMEC and several private Japanese firms. They also discussed alternative energy and the environment.
Following the meeting minister Ramirez cited the loan agreement as proof of PDVSA’s economic stability, with the state company’s earnings increasing by 42% in 2011.
“These banks don’t lend to bankrupt businesses, but to businesses that are growing and developing,” he said.
Venezuelan and Japan have been increasing their bilateral relationship in recent years, with the two nations signing an energy agreement in 2009 and striking a deal worth US$1.5 billion in 2011 for the improvement of El Palito and another refinery in the Eastern city of Puerto la Cruz.
Following the meeting, Japanese officials said they were eager to “deepen” cooperation with the South American country, which they cited as an “important business partner”.