Venezuela is currently in negotiations with China to earn a grace period in its oil-for-loans deal that is expected to improve the whole OPEC nation’s capacity to make bond payments amid an economic crisis, reported Reuters.
The two-year rout in oil markets has left the government of President Nicolas Maduro struggling to meet the original terms of the agreement, which require that state oil company PDVSA set aside more barrels for debt services when prices fall.
Under the financing agreement that was created by late socialist leader Hugo Chavez in 2007, Venezuela has borrowed over $50b from China. Venezuela is currently seeking a one-year grace period in which it would only pay interest on these loans.
Reuters added that in an attempt to pay China their debts back, Venezuela has shipped 630,000 barrels of oil and fuel to China in 2014, around 45% of the value of these shipments were not collected by Venezuela.