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Supporting Offtake of Venezuela’s Crude Oil and Petroleum Products
Intent to Diversify Supply Sources of Crude Oil

  • Region: Latin America and the Caribbean
  • Energy and Natural Resources
  • Overseas Investment Loans
NR/2011-21
June 29, 2011
  1. The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe)*1  signed on June 28 (Venezuelan Time) loan agreements respectively in the aggregate amount of 337.5 million US dollars (a combined total of 675 million US dollars) to finance the offtake arrangements of Venezuelan crude oil and petroleum products (including heavy oil, jet fuel and diesel oil) made by ITOCHU Corporation (ITOCHU) and Mitsubishi Corporation (MC).
     
  2. JBIC provides loans based on the framework agreements respectively signed by the subsidiaries of ITOCHU and MC with Petróleos de Venezuela S.A. (PDVSA). Under these agreements, both companies obtained a right to offtake crude oil and petroleum products for 15 years. The loans are co-financed with an eight-bank syndicate of The Bank of Tokyo-Mitsubishi UFJ (lead arranger of a loan to the ITOCHU subsidiary), Mizuho Corporate Bank (lead arranger of a loan to the MC subsidiary), Sumitomo Mitsui Banking Corporation, The Sumitomo Trust and Banking Co., Ltd. and Tokyo branches of BNP Paribas Bank, Crédit Agricole Corporate and Investment Bank, Deutsche Bank and Société Générale. The aggregate amount of each loan provided in the co-financing amounted to 675 million US dollars, with a combined overall total of both loans reaching 1,350 million US dollars. The co-financed portion by these private banks is covered by Investment and Loan Insurance for Natural Resources and Energy provided by Incorporated Administrative Agency, Nippon Export and Insurance (NEXI).
     
  3. Based on the above framework agreements, each of ITOCHU and MC will be able to offtake crude oil and petroleum products from PDVSA for 15 years, which is expected to help diversify supply sources of crude oil and petroleum products to Japan.
     
  4. Venezuela is currently the world's 10th largest crude oil producer, and if extra heavy crude oil in the Orinoco Belt is added, the country is endowed with oil reserves comparable to those in Saudi Arabia. According to a medium- and long-term strategic plan unveiled in 2010, PDVSA plans to increase the current production of 3 million barrels of crude oil per day to 4.48 million barrels per day by 2015 and double natural gas production. It is therefore preparing itself for a host of large-scale investment projects. 
     
  5. JBIC will continue to strengthen ties with resource companies in oil-producing countries and intends to support the securing of energy resources to Japan and the creation and expansion of business opportunities for Japanese firms in the oil and gas sector, while mitigating country risk with its capacity as an official financial institution.
Note
  1. *1 JBIC is the international wing of the Japan Finance Corporation (JFC; Governor: Shosaku Yasui).
  2.  

 

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