UPDATE 4-China to lend Venezuela $10 bln in coming months -source
(Adds Chinese Foreign Ministry comment)
By Corina Pons and Alexandra Ulmer
CARACAS, March 19 (Reuters) - China will lend Venezuela around $10 billion in coming months, half as part of a two-way financing deal and the rest to develop oil fields, a senior official at state oil company PDVSA said on Thursday.
Fresh funds are a boon for financially squeezed Venezuela and are likely to increase market confidence over the OPEC nation's ability to meet major debt payments and arbitration awards. Venezuelan bonds rose following the news.
However, relief may be tempered as the loans appear largely earmarked and will only go so far in countering a steep tumble in oil prices and Venezuela's severe recession.
The first $5-billion loan, a renewal of the long-standing Joint Chinese-Venezuelan Fund, will be destined for wide-ranging projects, the official said.
With a five-year payment term instead of the usual three, the loan will be signed this month and deposited in Venezuela's international reserves in April.
The other "special" $5 billion loan is likely to stipulate hiring Chinese companies to boost production in PDVSA's mature oil fields, the source said. That 10-year loan will be signed in June, taken out by Venezuelan state development bank Bandes, and invested in 2015.
"China wants to decisively back investments in areas like mature oil fields so that PDVSA can rapidly increase its production," said the source, who asked not to be identified. Continuación...