Venezuela’s Oil: “At The Service of China”

Via Bloomberg, a report that PetroChina Co. and Venezuela will build a refinery in Guangdong province that will rival the biggest Chinese oil-processing plant by capacity as the two nations reinforce their energy ties.  As the article notes:

“…PetroChina, the country’s largest oil company, will “further realize” the agreements with Venezuela on the 400,000 barrel-a-day refinery when energy officials from the South American nation visit Beijing this month, Chairman Jiang Jiemin told reporters today. The capacity will match the size of China Petroleum & Chemical Corp.’s plant in Zhejiang province.

Venezuela, the world’s fifth-biggest oil exporter, and China plan to boost oil production from their joint ventures in the South American nation by more than 10-fold in the next six years to 1 million barrels a day. China’s oil and natural-gas shortages will persist in the “long term,” PetroChina’s Jiang said on Jan. 12.

China National Petroleum Corp., PetroChina’s parent, signed an accord with Guangdong yesterday to construct the 55 billion- yuan ($8 billion) refinery, the Guangzhou Daily reported today. PetroChina will own more than 51 percent of the plant and Venezuela will have the rest, Jiang said in Beijing.

“We will start building the Yuedong plant as soon as we get government approval,” said Jiang, who added that a proposal to construct the refinery will be submitted this year to the National Development and Reform Commission, China’s top economic planner. Construction may begin next year, Guangzhou Daily said.

The refinery will source heavy crude oil “mainly from Venezuela,” Jiang said.

Venezuela’s oil is “at the service of China,” Chavez said on Feb. 17. “All the oil China needs for the next 200 years, it’s here. It’s in Venezuela.”

Venezuela has reached out to China and Russia in an attempt to obtain financing for projects in the South American country in exchange for oil and reduce dependence on the U.S. Petroleos de Venezuela SA, known as PDVSA, will provide 200,000 barrels a day to the Asian country to pay down a $4 billion loan from China Development Bank.

The two countries agreed in May 2008 to build a refinery in China and create a joint venture to drill for oil in the Junin 4 area, where China National has been quantifying and certifying reserves. Venezuela plans to export 1 million barrels of oil a day to China by 2011 or 2012, Chavez said then.

China, the world’s second-largest energy consumer, entered into oil-for-loans accords with Venezuela, Brazil and Russia last month, tapping its $1.95 trillion foreign-exchange reserves at a time when credit is scarce.”

This entry was posted on Monday, March 16th, 2009 at 10:10 am and is filed under China, China National Petroleum Corporation, Uncategorized, Venezuela.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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