Loan agreements in which smaller oil-producing countries took out loans that were to be repaid in oil when global oil prices were high are now struggling to adhere to the agreed payment schedules. Angola, Venezuela, Nigeria and Iraq have divided OPEC and are urging Gulf Arab memebrs of OPEC to lift prices--yet countries such as Saudi Arabia do not have a mounting debt problem, therefore, are not agreeing to the oil freeze which would in some way compensate for the 60% drop in oil prices since 2014.
Reuters recently published an article using publicly disclosed information that countries such as Angola, Nigeria, Iraq, Venezuela and Kurdistan must repay between $30US bullion and $50US billion in oil debt repayments. Angola alone owes Chia $25US billion since 2010 and lately borrowed $5US billion from China, meaning its entire oil output goes into loan repayments. This financial pressure means that if oil was at $120 per barrel, repaying $50US billion would only require 1 million barrels per day of oil production, yet now at $40 per barrel, 3 million barrels per day are needed daily in order to cover the mounting debt.
Amrita Sen from the think tank, Energy Aspects stated the countries that were quick to jump to loan offers may have caused irreparrable long-term damage to their economies,"All of those oil nations – Angola, Nigeria, Venezuela – have taken money for survival but haven't got any money left for investments. That is very damaging to their long-term growth prospects. People tend to look at current production volumes but if you have committed your entire production to China or other buyers under loans – then you cannot invest to keep growing and won't benefit from higher prices in the future."
Venezuela has also sought China to loan them a total of $50US billion in exchange for crude which. Caracas alone needs to produce 800,000 bpd, up from 230,000 bpd when oil was traded at $100US, in order to repay China.
Nigeria and Iraq are both in debt billions of dollars to companies such as Shell, Exxon Mobil and Lukoil. Nigeria owes $3US billion to international oil companies. Iraq owes $23US billion but will only has enough crude to be able to repay $9US billion. Iraqi Kurdistan, however, has managed to stay afloat after exporting its own oil, independent from Baghdad. OPEC's smallest producer, owes the Chinese and Thailand based lenders $8US billion.