China and Venezuela “China & Latin America Energy Meeting” Inter-American Dialogue Washington, March 21st and 22nd 2013 Andrés Rojas Jiménez Journalist Caracas Venezuela

Key points of China support during 2012 PDVSA increased its exports to Asia by 34% during 2012, that includes China but also India 862,500 barrels per day in 2012 versus 644,090 bpd in 2011 went to Asia, but exports to the U.S. were 964,020 bpd versus 993,610 bpd in 2011 China sold 400 trucks for fuels transportation Strategic alliances for construction, expansion and replacement of oil tankers Pdvsa purchased 106 rigs to chinese companies

Venezuela's oil exports to Asia in 2012 (barrels per day) SOURCE: PDVSA

Venezuela's oil exports in 2012 (barrels per day) SOURCE: PDVSA

Venezuela's oil exports in 2012 (barrels per day) Exports 2.505.260 barrels per day SOURCE: PDVSA

Venezuela's oil exports to China (barrels per day) 97.000 95.000 321.000 382.000 423.000 415.000 460.000 SOURCE: PDVSA

Venezuela's oil exports to US (barrels per day) SOURCE: EIA

Venezuela in 2012 began to be a net importer from U.S. of fuels (barrels per day) SOURCE: EIA

Venezuela oil consumption in 2012 (barrels per day) SOURCE: PDVSA

Public debt & Chinese loans (Millions of US dollars) SOURCE: BCV

Trade between China & Venezuela (Millions of dollars) SOURCE: INE

Mr Chen Yuan: “President Chávez told me he had a crazy idea about building up cooperation. I told him I had an even crazier idea”

3. Repago del préstamo con el BDC 1. Fuentes de Financiamiento Repago de la deuda de BANDES Contrato de Suministro Deuda de BANDES con el BDC por US$ 8.000 MM Crudo Cuenta Colectora en el BDC de BANDES y la ONT Préstamos del Banco de Desarrollo de China a BANDES por US$ 4.000 MM para el Tramo A y US$ 4.000 MM para el Tramo B destinados a conformar el FCCV . US$ BANDES adquiere deuda con la ONT por repago de la deuda del BDC US$ 2. Financiamiento de proyectos 4. Deuda de BANDES con la ONT Constitución del FCCV con US$ 12.000 MM Recibe Crédito Adicionales de los Entes Ejecutores Suscribe pagare a la ONT por los monto de capital e intereses cancelados del préstamo al BDC Proyecto 1 Proyecto 2 Proyecto 3 Crédito Adicional Crédito Adicional Crédito Adicional Con los Crédito Adicionales cancela Pagares Entes Ejecutores reciben obras terminadas

Fuentes de Financiamiento Financiamiento de proyectos Aportes a BANDES por US$ 2.000 MM para el Tramo A y US$ 2.000 MM Tramo B destinados a conformar el FCCV . Préstamos del Banco de Desarrollo de China a BANDES por US$ 4.000 MM para el Tramo A y US$ 4.000 MM para el Tramo B destinados a conformar el FCCV . Financiamiento de proyectos Constitución del FCCV con US$ 12.000 MM FCCV otorga financiamientos a Entes Ejecutores Proyecto 1 Proyecto 2 Proyecto 3

The Governments of China and Venezuela signed in November 2007 the agreement for establish the Chinese Venezuelan Joint Fund In that agreement it was agreed the amount of $ 4 billions consists of a loan from the China Development Bank to Bank of Economic and Social Development of Venezuela (Bandes) In September 2008, the parties expressed their willingness to extend a tranche of Chinese Venezuelan Joint Fund in the amount of U.S. $ 6 billions, to reach a total of U.S. $ 12 billions Loans granted by the China Development Bank as part of Venezuela's external public debt

The debt to China grew 460% between January 2008 and December 2012 The outstanding balance of the loan with China Development Bank added U.S. $ 22.6 billion, equivalent to 21.4% of total external public debt of Venezuela and 5 times the net Bandes, whose balance is 4500 million The Fund's financial resources Joint Chinese - Venezuelan is aimed at the execution of 121 major projects in different economic areas, such as light and heavy industry, infrastructure, social participation, development in energy and other projects relating to other areas that have a significant impact on social and economic development of Venezuela The BDC granted a loan of $ 20 billion to be paid in 10 years, but half of that amount is in yuans for goods manufactured in China

Meeting between President Nicolas Maduro and Chinese government authorities after Chavez's funeral to talk about oil projects and chinese loans

PROBLEMS, MISUSE AND GOALS UNFINISHED There is no transparency, no accountability for the money that Venezuele received from China On September 2011, President Hugo Chavez acknowledged that the China Development Bank had criticized for delays in the works that are funded with money from the loan PDVSA offered to China in 2007 that oil exports to that country would reach 800,000 barrels a day in 2012. What happened? There are delays on oil projects at Orinoco Belt between PDVSA and Chinese companies like CNPC or Sinopec About $ 800 million of Chinese loan has been used to import appliances

1974 – 2000 : 42 agreements signed in 26 years of diplomatic relations June 28, 1974 : China and Venezuela established diplomatic relations during the first government of Carlos Andres Perez 1974 – 2000 : 42 agreements signed in 26 years of diplomatic relations 2001 – 2012 : More than 200 agreements have been signed in 12 years With the creation of the High Level Joint Commission in 2001 sets the stage for the development of cooperation between the two countries In November 2007, the Sixth Meeting of the High Level Joint Commission created the Joint Financing Fund China - Venezuela (Heavy Fund)

1974 – 2000 : 42 agreements signed in 26 years of diplomatic relations June 28, 1974 : China and Venezuela established diplomatic relations during the first government of Carlos Andres Perez 1974 – 2000 : 42 agreements signed in 26 years of diplomatic relations 2001 – 2012 : More than 200 agreements have been signed in 12 years With the creation of the High Level Joint Commission in 2001 sets the stage for the development of cooperation between the two countries In November 2007, the Sixth Meeting of the High Level Joint Commission created the Joint Financing Fund China - Venezuela (Heavy Fund)

In August 2010, The Chinese-Venezuelan Large Volume and Long Term Chinese Fund was established The China Development Bank provides financing to Heavy Funda and Long Term Fund to Bandes PDVSA pays the loan by supplying oil and fuel (fuel oil)

Thanks you Andrés Rojas Jiménez arojas@el-nacional.com 58 412 6299353