Saturday, August 26, 2006

Chavez pledges 1,000,000 barrels of oil per day to China

Chavez pledges oil to support China's rise

BEIJING: Venezuela is committed to feeding China's appetite for energy, because it wants the country to become a new kind of great nation, President Hugo Chavez said yesterday after announcing a slew of oil deals.
He repeated a pledge to provide up to 1 million barrels per day of oil to China in the next decade, and unveiled plans to build a petrochemical plant with Sinopec on the Paraguana Peninsula.
Beijing has already signed exploration deals which will provide oil for a planned doubling of shipments from Venezuela in 2007, Chavez told a news conference.
His growing ties with the world's no 2 oil consumer are being closely watched in Washington, which despite a fraying relationship relies on Caracas for 12 percent of its oil imports.
"Venezuela has become a secure oil supplier for China, and more important by the day ... We know the increase in energy consumption that China needs for its development," Chavez said before a meeting with Chinese Premier Wen Jiabao.
"We need a China which grows more important and stronger by the day, because China is demonstrating to the world that you don't have to be an empire to be a great country," he added.
Chavez, who says he wants to usher in a revolution for the poor, has presented his left-wing agenda as an alternative to US free trade proposals for Latin America. Buoyed by high oil prices, the former soldier often accuses Washington of plotting to invade or assassinate him to control Venezuela's petroleum.
Energy Minister Rafael Ramirez underscored the commitment, saying that even though Venezuela is in talks with India and others in the region, Beijing is his priority.
"We are working with the Asian market, but our fundamental focus is meeting Chinese demand," Ramirez told reporters.
In July Venezuelan crude exports to China hit 155,000 barrels per day (bpd), but Chavez aims to boost this to 300,000 bpd in 2007, jumping again to 500,000 bpd by 2009.
Deals to provide the oil include one with China National Petroleum Corp for the mature Zumano field which produces 50,000 bpd, one with Sinopec for a second field that can pump 20,000 barrels per day and a block in the Orinoco heavy oil belt.
Chavez said that the Junin 4 block that CNPC would be helping to exploit held 40 billion barrels of oil. Venezuela plans to boost output to 5.8 million bpd by 2012, with much of extra output helping meet Chinese demand, Chavez added.
He said Venezuela also plans to establish a petrochemical base with China's top refiner Sinopec, in the Paraguana Peninsula, where the Amuay and Cardon refineries together make up the giant 940,000 bpd Paraguana refinery.
He provided no further details on the project but Ramirez said the two countries also hoped to build refining capacity in China to process extra-heavy Venezuelan oil.
The crude will be transported in an expanded fleet of ships, and some CNPC-owned vessels, with 500,000 bpd of capacity already promised by the Chinese partner if needed, Ramirez said.
"By 2012 we should have a fleet of 40 new tankers, 18 of which will come from China," he told reporters.
Chavez also plans to visit Shandong province, one of the centres of China's food processing industry, as part of planned cooperation on agriculture, to help achieve "food sovereignty." - Reuters

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