China's three main state-owned oil companies have strengthened their ties to
Venezuela's energy sector, signing six agreements and increasing their
investments to a planned $40 billion dollars.
The deals are the latest
of a string of multi-billion dollar South American ventures signed by Chinese
companies in recent months, aimed at acquiring major chunks of the continent's
rich resources and at helping fuel China's economic boom.
Among the
agreements signed was one by China National Petroleum Corp., President Jiang
Jiemin and Venezuela Oil Minister Rafael Ramirez, for the joint development of
the Orinoco basin Junin 4 oil block, the Chinese company said Friday in its
in-house newspaper. It said the agreement had been signed Wednesday.
The
cost of developing Junin 4, capable of producing 400,000 barrels of crude daily,
could be as much as $16 billion, with the block developed as a 60:40 joint
venture by state-owned Petroleos de Venezuela SA and CNPC, the two companies
said in April when they agreed to a preliminary pact.
Agreements were
also signed with China Petrochemical Corp., known as Sinopec Group, and China
National Offshore Petroleum Corp., known as Cnooc Group, Venezuela's Ministry of
Energy and Petroleum said in a posting on its website.
Sinopec agreed to
work with PdVSA in developing the Junin 1 and Junin 8 blocks, which could each
produce up to 200,000 barrels a day of crude, and to participate in building the
200,000-barrel-a-day Cabruta refinery to process Junin crude, it said.
Cnooc signed an agreement to join the Marical Sucre natural gas project,
which could produce 1.2 million cubic feet of gas and 37,000 barrels of
condensate daily, the ministry said.
Apart from direct investments by
the companies in specific projects, China has bankrolled Venezuela with a series
of credit-for-oil deals, including a $20 billion loan in April.
That
credit, half in dollars and half in Chinese yuan, is being used for a range of
infrastructure projects, and is to be repaid by future oil deliveries.
"Venezuela has become one of the most important suppliers of crude oil
and refined oil projects to China...we have become the third-largest supplier of
hydrocarbons to the Asian country," Energy Minister Ramirez was quoted as saying
in the website posting.
The Chinese companies had, in all, agreed to
invest "at least" $40 billion in Venezuela's oil and gas sectors by 2016, the
ministry said.
Officials from Cnooc and Sinopec were not available for
comment on the agreements.
Some of the agreements stem back to December
2009, when a raft of preliminary pacts were announced in Caracas.
One
project that hasn't been mentioned in announcements this week was a plan
initialled last year for Cnooc to help in the development of Venezuala's eastern
Boyaca 3 heavy oil block.
On Nov. 28, Cnooc and its Argentina partner
Bridas Corp. agreed to pay BP PLC (BP) $7.06 billion dollars for its 60% stake
in the South America-based Pan American Energy LLC.
That deal came two
months after Sinopec paid Spain's Repsol YPF SA (REP) $7.1 billion for a 40%
share of its assets in Brazil.