File photo of Chinese President Xi Jinping preparing to shake hands with Venezuelan President Nicolas Maduro before their meeting at the Great Hall of the People in Beijing, China, September 1, 2015. REUTERS/Parker Song/Pool
Bloomberg: Venezuela-China Relationship Sours as Sinopec Sues PDVSA
* Sinopec files lawsuit in the U.S. and requests for arbitration
* China has loaned about $50 billion to Venezuela in past decade
The relationship between China and Venezuela has seen better days.
China Petroleum & Chemical Corp., the state-controlled oil company, is suing Petroleos de Venezuela SA in U.S. courts for unpaid bills. Sinopec, as the Chinese company is known, also filed a request for arbitration against PDVSA at the International Chamber of Commerce, as it alleges damages of at least $23.7 million, according to court papers. The development comes almost three months after PetroChina Company Ltd advised its U.S. unit to avoid any involvement in future loans to PDVSA.
The lawsuit further illustrates how the relationship between the two long-time partners is turning bitter after delays in paying past loans and oil quality issues. It’s also evidence that Beijing might not always be there to bail out Venezuela, as it has done over and over in the past decade, Russ Dallen, a managing partner at Caracas Capital Markets, a Venezuela-based investment bank, said in a note to clients.
The court documents give some insight on what partners such as Sinopec deal with to help cash-strapped PDVSA to operate.
Read more ....
Update #1: Lawsuit shows China losing patience with Venezuela (Financial Times)
Update #2: China’s Sinopec sues Venezuelan oil firm as Beijing’s patience wanes over debt crisis (SCMP/AP)
WNU Editor: If there is one thing that the Chinese really hate .... it is when people who owe them money do not pay them. As to why did China and Russia lend tens of billions of dollars to Venezuela in the first place .... it made no sense to me then .... and today .... it is good to see all the smart people in Beijing and Moscow "swallowing crow" knowing that they really screwed-up on this one.
Update #3: More evidence on how screwed-up Venezuela really is .... Venezuela inflation reaches quadruple digits, hitting 1,369 percent (Reuters).
