China National Offshore Oil Corp (CNOOC), the country's largest offshore oil producer, has signed an agreement to develop oil and gas resources in Venezuela, the latest step in its overseas expansion.
CNOOC has signed a memorandum of understanding with its Venezuelan counterpart for the development of heavy oil and offshore oil and gas resources. The agreement was signed in the South American country on Dec 22, said a company executive yesterday.
It is the company's first entry into the country, said the executive who declined to be named, adding that it was a framework agreement.
CNOOC will help Venezuela to develop the Boyaca 3 oil block in the Orinoco belt, a large heavy-crude basin in eastern Venezuela, Wall Street Journal reported yesterday.
The move is part of Venezuela's efforts to increase oil sales to China to 1 million barrels per day from the existing 400,000 barrels per day, said the report.
The sound relationship between China and Venezuela would help domestic oil companies better foster their partnerships in the Latin American country, said Xia Yishan, an expert at the China Institute of International Studies.
"Venezuela has rich oil resources and will be one of China's important energy markets," he said.
Analysts said China should further diversify its oil import sources to ensure sustainable supplies. At present the Middle East, Africa and the Asia-Pacific are the three main regions from which China imports oil.
In another development, China's largest oil producer China National Petroleum Corp (CNPC) also moved forward by securing access to another oil block in the Orinoco region that could eventually produce 400,000 barrels of oil per day, Wall Street Journal reported.
CNPC also agreed to build a refinery with Venezuela that will process crude from a joint oil venture between the two countries, said the report.
But a CNPC spokesman yesterday said he was not aware of the deal.