By KEJAL VYAS
CARACAS -- The Venezuelan government said it has secured $1 billion in loans from a consortium of Japanese companies, led by the Japan Bank for International Cooperation, most of which will go toward expanding the South American country's El Palito refinery.
Oil Minister Rafael Ramirez also proposed that Japan boost imports from crude-rich Venezuela for power production during a two-day bilateral summit in Tokyo that wrapped up Tuesday, state oil company Petroleos de Venezuela, or PdVSA, said in a statement.
Under President Hugo Chavez, Venezuela has aimed to increase shipments to Asian markets, most of which so far have gone to resource-hungry China.
Venezuela has said it sends some 460,000 bpd of oil to China, with much of that going towards repayment of billions in oil-for-loans deals struck between the two countries.
As part of its new agreement with the Japanese firms, Venezuela said $800 million will go toward expanding the 140,000 bpd El Palito refinery, located on the northern coast of the state of Carabobo.
Another $200 million will be used to pay for goods and services for the oil sector, PdVSA said without providing further details.
El Palito has been among a number of PdVSA-run facilities hit by frequent accidents and halts in operations over the last year.
In June 2011, PdVSA signed a similar $1.5 billion agreement with Japanese companies to improve the El Palito and Puerto la Cruz refineries.
At the time, Ramirez told reporters that the expansion project would allow diesel exports to international markets from El Palito.
As part of its focus on Asian markets, Venezuela is also in the planning stages of a new oil pipeline with Colombia that would allow quicker transport of crude from Venezuela's vast Orinoco heavy oil belt to Colombia's Pacific coast.
The commodity would then be shipped to Asia, Venezuelan officials say.
The South American government aims to boost crude production by the end of this year to 3.5 million bpd, up from the 3 million bpd it says it is producing currently.
Dow Jones Newswires