UPDATE 1-Japan to lend $1.5 bln to Venezuela's PDVSA

 * Money to be repaid in PDVSA oil shipments

 * Japan to receive Santa Barbara crude

 (Adds official confirmation)

 CARACAS, June 15 (Reuters) - Japan will lend $1.5 billion
to Venezuela's state oil company PDVSA in return for supplies
of 3 million barrels crude annually over a five-year period, a
Japanese diplomat said on Wednesday.

 Takashi Kondo, economic attache at the Japanese embassy in
Venezuela, told Reuters the crude supplied would be the
low-density Santa Barbara type most suitable for the Asian
nation's refineries.

 As well as helping cash-short PDVSA's finances, the deal is
also intended to aid Japan's electricity generation after its
earthquake and nuclear crisis earlier this year.

 The low interest, "soft" credit deal from Japan Bank for
International Cooperation (JBIC) will be inked on June 28 in
Caracas at a ceremony to be attended by Venezuela's Energy
Minister Rafael Ramirez, he said.

 PDVSA, the bankroll for President Hugo Chavez's socialist
policies, urgently needs more income even though global oil
prices are riding high. It is contending with falling
production plus ambitious investment plans in the southern
Orinoco Belt region.

(Reporting by Diego Ore and Deisy Buitrago; Writing by
Andrew Cawthorne;editing by Sofina Mirza-Reid)