Chevron has extended a $2 billion line of credit to its joint venture with state-owned Petroleos de Venezuela SA, the Venezuelan company said.
PDVSA and Chevron on Wednesday signed off on the terms and conditions of that loan to Petroboscan, a 20-year venture formed in 2006.
The $2 billion credit line will need to be fully repaid by 2025 at 4.5 percentage points over Libor, with no additional costs, PDVSA said in a statement.
This money will help finance “works to maintain and increase current average crude production of 115,000 barrels of crude per day at the Boscan field” in the Orinoco Oil Belt, the company added.
The agreement includes “the payment of Petroboscan’s pending liabilities,” whose amount was not revealed, and the channeling of revenues from hydrocarbon sales to ensure funding for the joint venture.
President Hugo Chavez’s leftist government in 2007 restored state control over heavy-oil projects in the Orinoco Belt of eastern Venezuela as part of a larger socialist drive, giving PDVSA a minimum 60 percent stake in joint ventures with foreign multinational firms.
Chevron is the only U.S. oil company that accepted the new arrangements, with Conoco-Phillips and Exxon refusing and opting to withdraw from Venezuela.
Other companies that stayed on, enticed by the massive Orinoco reserves, include Britain’s BP Plc, France’s Total, Italy’s ENI, Norway’s Statoil and China’s CNPC.
Chevron’s president for Latin America and Africa, Ali Moshiri, said last September in Venezuela that the South American country is unique in terms of its natural resources and a “logical” investment destination.
He added then that the company was willing to invest in more projects in Venezuela.
Venezuela’s certified oil reserves amount to nearly 300 billion barrels, equivalent to 25 percent of the world’s total.
That volume of recoverable crude is mostly located in the Orinoco Belt and exceeds the 265 billion barrels of proven reserves in Saudi Arabia, previously considered the world’s largest oil nation.