Chavez Seeks to Boost Oil Production With China Deal

Venezuelan President Hugo Chavez said China will invest $16 billion to boost oil production in the country, as part of a strategy to reduce dependence on the U.S. and strengthen oil ties with other nations.

A Venezuelan commission is meeting with Chinese officials, and the deal to develop the block with state oil company Petroleos de Venezuela SA will be completed in October, Chavez said yesterday in comments on state television. He didn’t name the Chinese partners or identify the Venezuelan block where they will invest.
The deal for China to invest over three years follows a joint venture agreement with a group of five Russian companies announced last week to spend $20 billion developing the Junin 6 field. Chavez said output from Russian and Chinese projects in the Orinoco oil fields combined will produce 900,000 barrels of crude a day.

“Yesterday after intense days of negotiations in Beijing, an agreement was made with China to invest $16 billion over the next three years,” Chavez said. “Adding the deals with Russia and China there will be investments of $36 billion to produce with our partners.”

“China’s ambitious plan to secure overseas crude supply will continue in the near future before the global financial market goes back to normal,” Qiu Xiaofeng, chief oil analyst with China Merchants Securities Ltd., said by telephone in Shanghai.

Bloomberg