Venezula plans to send as much oil to China as it does to its traditionally largest buyer, the U.S., within the next three years, Oil Minister Rafael Ramirez said Thursday.
Venezula plans to send as much oil to
China
as it
does to its traditionally largest buyer, the
U.S.
,
within the next three years, Oil Minister Rafael Ramirez said Thursday.
The South American country also continued reaping the benefits of high global
oil prices with its state energy monopoly Petroloes de Venezuela, or PdVSA,
taking in a record revenue of $127.8 billion in 2011 from 2010's $94 billion,
Ramirez said in comments carried on state television.
During his more than 12 years in power, President Hugo Chavez has used income
from PdVSA to bankroll the large-scale social programs that have won him strong
support among the country's many poor. During that time he has also
strengthened economic ties with
China
,
which has granted the hydrocarbons-rich country billions in loans for
development projects and is working in various areas from housing construction
to mining in
Venezuela
.
As part of its repayment for the loans,
Venezuela
sends
oil shipments to
China
,
which on Thursday, Ramirez said have reached 460,000 barrels a day.
"We are going to sell
China
one
million barrels a day by 2015," by which time the Asian economy will be
buying just as much oil as the
U.S.
, said
Ramirez, who doubles as PdVSA chief.
He added that
China
"will pay a slightly better [higher] price" than those paid by other
buyers "because it's a distinct market."
Neither country has formally published the loan-for-oil pacts but Venezuelan
government documents reviewed by The Wall Street Journal in November showed
that
China
appears to be paying roughly market prices, despite speculation that
Venezuela
was
selling its crude at steep discounts.
Ramirez explained that costwise, shipments to China are not more expensive than
those to the U.S. because Venezuela sends multiple tankers that hold 300,000
barrels of oil to the U.S., while for China they send "supertankers"
that can hold as much as 2 million barrels, taking all the oil in one trip.
U.S.-bound shipments "end up being more expensive than those sent to
China
,"
Ramirez said.
In addition, PdVSA's joint venture with China National Petroleum Company, or
CNPC, allows for both parties to split the transport cost evenly, Ramirez
added.
Venezuela
is
planning heavy investments of $15 billion a year into its vast
Orinoco
heavy
oil reserves in a bid to sharply increase output in upcoming years.
The Oil Ministry has said it aims to reach 3.5 million barrels a day in total
production this year from 3 million. They plan to nearly double output by 2019.
The government's data, however, has been disputed by others like the
Organization of Petroleum Exporting Countries and the International Energy
Agency, both of which put current Venezuelan production closer to 2.4 million
barrels daily.
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