Venezuela, China announce joint oil venture

Caracas, (IANS/EFE) Venezuela and China will together invest $16.32 billion in a joint oil venture to pump 400,000 barrels per day from the Junin 4 Block in the Andean nation's crude-rich Orinoco Belt, state-owned Petroleos de Venezuela S.A. has said.

PDVSA will own 60 percent of the new enterprise, with the remainder controlled by the China National Petroleum Corporation.

The 25-year business plan calls for production to begin in 2012 at the level of 50,000 barrels per day (bpd), increasing to 400,000 bpd by 2016, PDVSA said Monday.

The project also envisions construction of a refinery to process the extra-heavy, high-sulfur crude characteristic of the Orinoco Belt.

PDVSA's announcement followed a meeting last Saturday between Venezuelan President Hugo Chavez and a high-level Chinese delegation that witnessed the signing of several bilateral accords.

Chavez noted then that Venezuela is already sending roughly 500,000 bpd to energy-hungry China and said Beijing had pledged to provide Caracas with $20 billion in long-term financing in exchange for increased supplies of crude.

"All the petroleum China could need to consolidate itself as a great power is here," Venezuela's leftist leader said.

Trade between China and Venezuela totaled $10 billion last, according to data from the Beijing government.