Russia Getting $2 Billion in Loans to Buy Oil Equipment From U.S.

Russia will get $2 billion in U.S. loans to buy American oil and gas equipment and help keep the former Soviet republic the world’s biggest oil producer, the Export-Import Bank’s vice chairman said Friday.

“Russia was and still barely is the No. 1 producer of crude in the world, but its oil production is plummeting, it’s simply dropping like a rock,” Eugene K. Lawson told reporters.

The Export-Import Bank, owned by the U.S. government, lends money and guarantees loans by private banks to firms in other countries to encourage them to buy American goods. Its ambition is to make the United States the chief exporter to Russia, which imports goods worth $30 billion a year, Lawson added.

The United States also has an interest in promoting alternative sources of oil supply to lessen its dependence on the Middle East.

Lawson reported that Japan is also trying to sell Russia $700 million worth of oil and gas equipment and is closely tracking U.S. negotiations.

“There are now 35,000 to 36,000 idle wells in Russia,” he said. “Those wells are idle because they don’t have spare parts.”

The U.S. bank will make some of the loans directly. The rest of the money will come from private banks, with a 100% guarantee from the government bank.