Due to low oil prices, poor oil-producing countries, including Angola, Venezuela, Nigeria and Iraq who receive loans under conditions of high of quotes, it was in debt. Now to service their financial obligations, they have to put to its creditors three times more oil than under favorable price conditions, according to Reuters. In addition, the increased debt burden has exacerbated the rift between OPEC members — poor countries insist on agreeing production cuts, while wealthy members of the cartel, including Saudi Arabia, oppose this measure, despite the fact that over the past two years the price of oil fell by 60%.
Angola, the largest oil producer in Africa, took China in 2010, a total of $25 billion, including $5 billion last December. This year the state oil company of Angola, Sonangol had to be diverted to debt service of the country almost the entire volume of oil produced. This year Angola, Nigeria, Iraq, Venezuela and Kurdistan will have to service their debts to their creditors put oil in the amount of $30-50 bn, according to calculations by Reuters, based on information from open sources and data sources involved in the negotiations on the restructuring of loans. At an oil price of $120/bbl. to repay debt of $50 billion would require annual oil exports of 1 million barrels/day, whereas an oil price of $40/bbl. — more than 3 million barrels/day. “All these oil producers — Angola, Nigeria, Venezuela — took to survive, but they have no funds for investment, — the Agency says Amrita sen of research company Energy Aspects. — This is a very negative impact on the prospects of their long-term development”.
China also became the largest lender in Venezuela. Since 2007, Venezuela has received from China $50 billion in the framework of oil and fuel in exchange for loans. Only in September 2015 Caracas has received from Beijing $5 billion, the terms of Venezuelan-Chinese agreements is not known, but according to analysts at Barclays, this year in Caracas due to supply Beijing oil at $7 billion, which would require an annual delivery volume of 800 thousand/bbl. against 230 thousand/barrel. when oil was trading at $100/bbl. Last week the representative of the Chinese foreign Ministry Hong lei said that Venezuela failed to agree on mitigation options of its line of credit. The terms of the transaction were not disclosed.
Nigeria and Iraq also owes billions of dollars in oil supplies to several companies, including Shell and Exxon Mobil, told Reuters sources in the industry and in state-owned companies of the two countries.
Iraq is trying to negotiate the easing of credit lines with Exxon, Shell and LUKOIL ohms to send more funds to projects to develop new fields. This year, the country had to send contractors oil at $23 billion, but Baghdad now says that the country has enough oil to repay only $9 billion in debt.
Nigeria needs this year to direct the major oil companies of oil for $3 billion in exchange for investments aimed at the development of the last fields of the country.
Iraqi Kurdistan needs this year to direct trading companies Vitol, Petraco, as well as Turkey oil at $3 billion.
From 2009 to 2015, Ecuador has borrowed from Chinese and Thai companies about $8 billion, for which the country has committed to pay the oil supply, follows from the data of the state oil company of Ecuador.
The more wealthy members of the cartel — Saudi Arabia, UAE, Kuwait and Qatar — very little JV with foreign companies, no agreements on a prepaid basis with China and no need to borrow from traders.
Since a large part of oil revenues to the poor members of the cartel recently went on repayment of debts, financing of infrastructure projects and mining virtually stopped. In these conditions in Nigeria and Venezuela is expected sharp production cuts, while Saudi Arabia actively funded the new projects, on the contrary, is preparing to increase. Lack of debt allows Riyadh to invest in the development of fields and strengthening its positions on the world oil market.
Meanwhile, Nigeria and Venezuela urgently needs an agreement to freeze production, which could increase quotes and to help them to Finance new projects and to reduce the amount of oil that they need to send to creditors to pay debts.