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Venezuela: World Bank Freezes Oil Loans

BBC News
January 10th, 2003

The World Bank has frozen the distribution of $225m in loans to Venezuela's oil industry until the country ''normalises''.

The Bank's private sector investment arm - the International Finance Corporation (IFC) - had been negotiating the loans with Perez Companc Venezuela (PCV).

''There are number of legal agreements that still need to be finalized. IFC will commit to the project once these have been completed, and conditions have normalized in Venezuela,'' an IFC spokesman told Reuters.

Right-wing business groups and unions have been striking since 2 December to remove democratically elected President Hugo Chavez.

The economy of Venezuela - the world's fifth largest oil export which supplies 13% of US oil needs - has been severely undermined by the at times violent strikes during which demonstrators from both sides have died.

The IFC had been considering the loans for PVC, which is owned by Argentina's Pecom Energia, to help expand production.

''IFC will continue to work closely with Perez Companc Venezuela to enable the client to be in a position to move forward with the project,'' the IFC spokesman said.

PCV operates four oil fields in Venezuela under license from the state-owned oil company PDVSA.

The IFC provides loans and logistical support to develop the private sector in developing countries.

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