China is turning up the heat on Venezuela.
One of its biggest state-owned companies has filed a lawsuit against Venezuela’s oil company, PDVSA, in a U.S. court, claiming millions of dollars it says it is owed.
Chinese oil and gas company Sinopec is suing PDVSA for $23.7 million plus interest and damages, accusing the Venezuelan company of breach of contract and conspiracy to defraud.
According to court documents filed on Nov. 27 in Houston, Texas, Sinopec USA claims that PDVSA has failed to pay for half of a $43.5 million order for steel products. The lawsuit was first reported by the Financial Times on Wednesday.
The disputed amount is small when compared to the massive debts Venezuela is struggling to repay.
Venezuela and PDVSA owe more than $60 billion just to bondholders. In total, the country owes $196 billion, according to a paper published by the Harvard Law Roundtable.
China’s state banks loaned $60 billion to Venezuela between 2007 and 2016, and the lawsuit is just the latest sign that Beijing is growing impatient with the embattled South American country.
Sinopec doesn’t hold back in its complaint, slamming PDVSA for its “disingenuous nature [and] feigned promises to make full payment.”
It alleges PDVSA “hid behind a complicated series of subsidiaries and affiliates,” detailing how various PDVSA-affiliated companies “were acting in concert to defraud Sinopec.”
PDVSA could not be reached for comment outside of business hours.
Paying Sinopec’s bill is far from the most pressing matter facing Venezuela.
The country is suffering a massive humanitarian crisis. There is a severe shortage of food and medicine. Many Venezuelans can’t buy basic items because prices are skyrocketing. The country’s currency, the bolivar, is worth less than a tenth of a U.S. penny, and the central bank has less than $10 billion left in reserves.
PDVSA made a $1.1 billion debt payment last month. Shortly after, Venezuelan President Nicolas Maduro said that Venezuela and PDVSA would seek to restructure their debt payments.
CNNMoney (Hong Kong) First published December 7, 2017: 6:02 AM ET