Russia said Venezuela has asked to restructure its debt, underscoring the Latin American country's financial woes and its reliance on the Kremlin.
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"There's been a request from colleagues in Venezuela to carry out a restructuring," Russian Finance Minister Anton Siluanov said Friday, according to Russian news agencies. "I am sure that we will find a mutually acceptable solution with Venezuela."
He said negotiations were taking place within the Paris Club of creditor countries and through bilateral contacts.
Russia is a key creditor and supporter of embattled Venezuelan President Nicholas Maduro through state loans and credits from Russian state-controlled oil giant PAO Rosneft to Venezuelan state oil company PdVSA.
The fall of oil prices in 2014 has plunged Venezuela into its deepest economic crisis, triggering sharp shortages of food and medicine. More than 120 people died in protests against the government earlier this year.
As the crisis worsens, Mr. Maduro is increasingly facing a choice of whether to use scarce dollars to service the country's debt or to import food.
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Venezuela's debt to Russia stood at $2.84 billion as of September 2016. Russia's Rosneft lent more than $1 billion to PdVSA in April this year in prepayments for future oil supplies, bringing loans to the oil company to around $6 billion in the past few years. That makes Rosneft, which is controlled by the Kremlin, a crucial financial lifeline for an oil producer struggling with collapsing revenue and isolation from the credit markets.
Venezuela faces $3.5 billion in bond payments in October and November, with less than $1 billion of liquid reserves, according to estimates by New York's Torino Capital. Many economists believe the country will struggle to avoid default without another lifeline from Russia.
Russia has long allied with the Venezuelan government, providing loans and selling arms to the government of Mr. Maduro's predecessor, Hugo Chávez. Russian officials have criticized U.S. sanctions on Venezuela as an attempt to destabilize its government.
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(END) Dow Jones Newswires
September 08, 2017 13:54 ET (17:54 GMT)