Venezuelan, Chinese ties

Venezuela and China are deepening their economic and political ties. Recently Venezuela President Hugo Chavez and Chinese Communist Party Politburo members signed six cooperation agreements, mostly in the energy sector, and one to form a $6 billion binational investment fund.

The energy accords focus on JVs to explore for oil and gas deposits in both countries, and to extract, transport, store, and refine these resources. These measures will help advance Venezuela’s goal of diversifying its trading relations away from the US and reducing its dependence on that market for its oil exports. China will provide an expanded supply of oil and gain a larger foothold in the Latin American region.

The deals include:
— A JV of PDVSA and China National Petroleum Corp. for oil production in the Campo Junin field in Venezuela’s heavy-oil Orinoco basin.
— A JV to build tankers to transport the crude, with a goal of eventually having a full fleet of tankers.
— Accords to jointly service and maintain oil wells and to increase the daily supply of Venezuelan oil to China.
Separately, Ramirez said, “We are planning to build 14 new refineries in other countries, especially in Latin America. Most of them were already included in previous energy agreements. These facilities will guarantee excellent volumes of oil from the Orinoco belt for several countries in the continent that do not have this resource.”

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