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China will pump 40 billion dollars in Venezuela energy

by Staff Writers
Caracas (AFP) Dec 2, 2010
China will invest more than 40 billion dollars in Venezuela's oil- and gas-rich eastern Orinoco belt by 2016, Energy Minister Rafael Ramirez told a meeting of gas exporters in Qatar Thursday.

Ramirez said China Petroleum and Chemical Corporation (Sinopec) would invest in oil extraction projects in the Junin 1 and Junin 8 blocs, while China National Oil Off Shore (CNOOC) would undertake gas production in the Mariscal Sucre gas fields on Venezuela's eastern shores.

"All these agreements represent at least 40 billion dollars that will be invested during a period up to 2016," Ramirez told the Gas Exporting Countries Forum ministers' meeting in Doha.

Junin 1 and 8 blocs each holds an estimated production yield of 200,000 barrels per day (bpd), which will be jointly exploited by Sinopec and Venezuela's state-run oil company Petroleos de Venezuela (PDVSA), the minister said in a PDVSA statement.

The China National Petroleum Corporation (CNPC) is already working with PDVSA in Orinoco's Junin 4 bloc, that holds a potential 400,000 bpd production.

Currently some 30 companies from more than 20 different countries are operating in the Orinoco Belt, a 55,314 square kilometer (21,360 square mile) oil reserve in the Orinoco River area.

For years experts believed that it was too expensive to extract and refine the heavy and extra-heavy oil in the area. But the drop in light oil reserves and the increase in global oil prices -- currently around 80 dollars a barrel, against 20 dollars a barrel in the 1990s -- has revived the interest among foreign investors.

These companies want some of the action even after leftist President Hugo Chavez changed investment rules in 2007 and mandated that PDVSA maintain a minimum 60-percent stake in all Orinoco projects.

Ramirez said Venezuela was already delivering around 362,000 bpd of oil to China. "This makes us the Asian country's third-largest oil supplier," he added.

A member of the Organization of Petroleum Exporting Countries, Venezuela is the world's second-leading crude oil producer behind Saudi Arabia. It currently extracts more than three million bpd of crude.

Ramirez earlier this year, said around 120 billion dollars will be invested in the Orinoco Belt between now and 2017, helping the country reach its oil production goal of close to seven million bpd by 2021.

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