Today’s Energy Daily reports that Venezuela and China are expanding their oil ties, with their respective state petroleum companies stating that they will spend more than $10 billion to develop the oil-rich Faja del Orinoco region. President Hugo Chavez also said earlier this week Venezuelan state-owned energy firm PDVSA would collaborate with China National Petroleum Corp. to build three new refineries in China.

As the article notes, this enhanced partnership follows the July pullout of ConocoPhillips and Exxon Mobil from Venezuela after Chavez’s plan to give PDVSA a majority stake in all the country’s oil and gas operations. Clearly, this type of agreement gives Chavez an opportunity to diversify his customer base away from the U.S. being his top exporter and gives China access to a very compelling opportunity.

“…Venezuela already enjoys strong petroleum ties with China. Earlier this year Ramirez announced Venezuela would buy 13 new oil rigs from a Chinese supplier. Over the past several years Chavez has worked steadfastly to improve Venezuelan-Sino oil ties. In August 2006 he traveled to China to finalize a deal for the construction of 24 drilling rigs in Venezuela and the purchase of 18 oil tankers with a $1.8 billion price tag….

….Since assuming office in 1998, Chavez has courted China and even expressed willingness to sell fuel to North Korea. He has also cultivated closer ties with Iran, drawing sharp criticism from Washington and increased concerns about the foreign-policy leanings of the Venezuelan president.

PDVSA has also in recent months announced plans to expand its exploration operations to Vietnam, where Venezuelan petroleum officials are reportedly interested in potential offshore sites, though it already rejected two sites offered by Vietnam following a review of a recent geological survey….”