Venezuela signs deals to supply oil, fuel to China

Updated: 2007-03-27 13:36

Caracas -- Venezuela on Monday signed deals to supply crude and fuel oil to China, part of President Hugo Chavez's attempt to break his dependence on energy exports to the United States.

Senior officials at the ceremony said Venezuela would double its exports to China, sending some 300,000 barrels per day (bpd) of crude there in 2007.

They said Chavez had been mistaken in a speech when he said the Caribbean country would supply 500,000 bpd by December.

"He has so many figures in his head, he made a mistake. It is about 300,000 bpd," said Eulogio del Pino, a director of state oil company PDVSA.

The terms of the contracts were not immediately clear.

"Venezuela has always said it wants to turn itself into a secure and increasing source of oil supply to China," Chavez told officials gathered for the visit of Li Changchun, a member of the Standing Committee of the Communist Party of China's Politburo.

China is the world's second biggest oil consumer. Analysts reckon Venezuela pumps about 2.7 million bpd, although it claims 3.3 million bpd. It is the No. 5 oil exporter to the United States.

Last year, the OPEC nation sold only 150,000 bpd of crude to China. Chavez said on Friday Venezuela was looking to ship 1 million bpd there by 2012.

China is also planning to develop the heavy crude of Venezuela's Orinoco Belt and work jointly with Venezuela on building refineries and tankers.

Venezuela is forging oil co-operation with countries such as Iran, China and Russia while stripping US majors such as Conoco Phillips, Chevron and Exxon Mobil of their majority stakes in Venezuelan projects.

Chavez said China had given its approval to a long-discussed US$6 billion investment fund, for development work in Venezuela. China would supply US$4 billion with Venezuela chipping in the remaining US$2 billion.

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