Chávez woos China with pledge
Chávez woos China with pledge
By David Lague
Copyright by International Herald Tribune
Published: August 24, 2006
BEIJING Venezuela plans to increase oil exports to China sixfold before 2019, President Hugo Chávez of Venezuela said here Thursday after holding talks with President Hu Jintao.
"In 2009, we'll reach half a million barrels a day, and in the decade after that we'll see a million barrels," Chávez said.
The left-leaning Chávez, a strident critic of Washington, wants to reduce Venezuela's dependence on oil exports to the United States and sees China as an important alternative. Venezuela is the fifth-biggest oil exporter over all and currently ships 1.5 million barrels of a day to the United States. This is about two-thirds of its oil exports.
In an interview Thursday in Beijing with Venezuelan state television, Chávez said the country was now exporting almost 150,000 barrels of oil a day to China, The Associated Press reported.
Chávez said joint venture agreements would be signed with two of China's state-owned oil giants, China Petroleum & Chemical, known as Sinopec, and China National Petroleum Corp., or CNPC, to extract and export crude from the Orinoco River basin in Venezuela.
The official China Daily newspaper reported Aug. 17 that CNPC had been involved in certifying oil reserves in the basin, where Venezuela's state-owned oil company planned to sharply increase production. Chávez is on his fourth visit to China since 1999 and has been outspoken in calling for closer economic and political ties with Beijing. But China's response to these overtures has been lukewarm, at least publicly.
The official Chinese media announced Chávez's impending arrival without the extensive coverage devoted to recent high-level visits by senior officials from oil-rich Middle Eastern states.
China's Foreign Ministry said Chávez was scheduled to meet Friday with Prime Minister Wen Jiabao and the country's top legislator, Wu Bangguo.
China's soaring demand for energy makes it an attractive market for Venezuela as it attempts to diversify its oil sales away from the United States. China is the second-biggest oil consumer, behind the United States, and almost half the oil it uses is imported.
Chinese crude imports in the first half climbed 15.6 percent from a year earlier to 2.97 million barrels a day, or 73.3 million metric tons, according to Chinese customs statistics.
Some oil industry analysts have questioned whether the Latin American exporter can sharply increase sales to Chinese refineries.
They note that the longer shipping distances to China mean that Venezuela would be losing money if it switched exports away from the United States. They also say China lacks the refining capacity to handle the type of crude oil Venezuela produces.
However, Kurt Barrow, a Singapore- based analyst with the U.S. energy consultants Purvin & Gertz, says bolstering oil shipments could suit both sides.
"From a purely economic point of view, it is not optimal to send crude all the way from Venezuela to China," he said. "But, for geopolitical reasons, I would take it very seriously. Hugo Chávez wants to diversify his buyer base away from the U.S., and China wants to diversify its purchases away from the Middle East."
Barrow also said China could tailor the extra refining capacity it is building to suit Venezuelan crude.
"When you build new capacity, you can design it to refine whatever quality of crude you want it to," he said.
The Paris-based International Energy Agency said in a forecast July 12 that China's oil consumption would increase 6.1 percent this year to 7 million barrels a day. By 2009, when its demand is expected to reach 8.2 million barrels a day, China will need to import 4.4 million barrels a day, according to International Energy Agency figures.
By David Lague
Copyright by International Herald Tribune
Published: August 24, 2006
BEIJING Venezuela plans to increase oil exports to China sixfold before 2019, President Hugo Chávez of Venezuela said here Thursday after holding talks with President Hu Jintao.
"In 2009, we'll reach half a million barrels a day, and in the decade after that we'll see a million barrels," Chávez said.
The left-leaning Chávez, a strident critic of Washington, wants to reduce Venezuela's dependence on oil exports to the United States and sees China as an important alternative. Venezuela is the fifth-biggest oil exporter over all and currently ships 1.5 million barrels of a day to the United States. This is about two-thirds of its oil exports.
In an interview Thursday in Beijing with Venezuelan state television, Chávez said the country was now exporting almost 150,000 barrels of oil a day to China, The Associated Press reported.
Chávez said joint venture agreements would be signed with two of China's state-owned oil giants, China Petroleum & Chemical, known as Sinopec, and China National Petroleum Corp., or CNPC, to extract and export crude from the Orinoco River basin in Venezuela.
The official China Daily newspaper reported Aug. 17 that CNPC had been involved in certifying oil reserves in the basin, where Venezuela's state-owned oil company planned to sharply increase production. Chávez is on his fourth visit to China since 1999 and has been outspoken in calling for closer economic and political ties with Beijing. But China's response to these overtures has been lukewarm, at least publicly.
The official Chinese media announced Chávez's impending arrival without the extensive coverage devoted to recent high-level visits by senior officials from oil-rich Middle Eastern states.
China's Foreign Ministry said Chávez was scheduled to meet Friday with Prime Minister Wen Jiabao and the country's top legislator, Wu Bangguo.
China's soaring demand for energy makes it an attractive market for Venezuela as it attempts to diversify its oil sales away from the United States. China is the second-biggest oil consumer, behind the United States, and almost half the oil it uses is imported.
Chinese crude imports in the first half climbed 15.6 percent from a year earlier to 2.97 million barrels a day, or 73.3 million metric tons, according to Chinese customs statistics.
Some oil industry analysts have questioned whether the Latin American exporter can sharply increase sales to Chinese refineries.
They note that the longer shipping distances to China mean that Venezuela would be losing money if it switched exports away from the United States. They also say China lacks the refining capacity to handle the type of crude oil Venezuela produces.
However, Kurt Barrow, a Singapore- based analyst with the U.S. energy consultants Purvin & Gertz, says bolstering oil shipments could suit both sides.
"From a purely economic point of view, it is not optimal to send crude all the way from Venezuela to China," he said. "But, for geopolitical reasons, I would take it very seriously. Hugo Chávez wants to diversify his buyer base away from the U.S., and China wants to diversify its purchases away from the Middle East."
Barrow also said China could tailor the extra refining capacity it is building to suit Venezuelan crude.
"When you build new capacity, you can design it to refine whatever quality of crude you want it to," he said.
The Paris-based International Energy Agency said in a forecast July 12 that China's oil consumption would increase 6.1 percent this year to 7 million barrels a day. By 2009, when its demand is expected to reach 8.2 million barrels a day, China will need to import 4.4 million barrels a day, according to International Energy Agency figures.
posted by Carlos T Mock at 7:12 AM
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