Venezuelan President Nicolas Maduro is seeking several billion dollars from Qatari lenders to help plug a budget gap after oil lost more than half its value.
“We’re finalizing a financial alliance with important banks from Qatar that will give us sufficient oxygen to help cover the fall in oil prices and give us the resources we need for the national foreign currency budget,” he said on state television.
Maduro, Hugo Chavez’s hand-picked successor, is turning to Asia and the Middle East for relief as crude’s nosedive of more than 50 percent erodes international reserves and funding options. Boasting the world’s biggest oil reserves, the Latin American nation has seen its crude output slump since 2008 and imports of refined products surge as state-owned Petroleos de Venezuela SA revenue is diverted to social programs and fuel subsidies.
The financing would be for “various” billions of dollars for 2015 and 2016, Maduro said from Doha.
While in China last week, he said Venezuela obtained $20 billion in new Chinese investment for economic, energy and social projects. He didn’t give details.
The price of Venezuela’s oil, which accounts for about 95 percent of exports, fell last week to $42.44 a barrel from a peak of $100.64 on June 27. The largest decline in oil prices since 2008 has raised concerns that Venezuela could default as foreign currency reserves decline and the economy contracts.
Prices need to return to about $100 a barrel for economic equilibrium, Maduro said in Iran during a tour of Middle Eastern members of the Organization of Petroleum Exporting Countries. The president also met with Saudi Oil Minister Ali Al-Naimi, according to tweets from Venezuela’s Finance Minister Rodolfo Marco Torres.
“We have to work to defeat the strategy of global finance and of the U.S. to destroy our natural resource. I think we are clear in the strategy, and I have very positive results from this tour. Good news will keep coming,” Maduro said in a televised interview from Doha.
Hydraulic fracturing, or fracking, has unlocked supplies from shale formations in the U.S., flooding the market with oil, Maduro said. Prices continued to decline after officials from Saudi Arabia, the United Arab Emirates and Kuwait reiterated they won’t curb output to halt the decline.
WTI slid 4.3 percent, to $46.28 a barrel on the New York Mercantile Exchange at 1:30 p.m in New York. Venezuela’s benchmark bonds due in 2027 fell 3 percent to 39.875 cents on the dollar.