China, Venezuela firms to co-develop oilfields
State oil companies from China, the world's second-largest oil importer, and fifth-largest exporter Venezuela are strengthening their partnership by co-investing in oilfields in the South American country.
China National Petroleum Corp (CNPC), the parent company of the nation's largest oil producer listed in Hong Kong, PetroChina, on Thursday signed an initial agreement with Venezuela's state oil company, Petroleos de Venezuela SA (PDVSA), to develop and manage Venezuela's Zumano oilfields in the eastern part of the country, PDVSA said in a statement on its website.
Liu Weijiang, a CNPC spokesman, on Friday told China Daily the two companies signed an agreement this week during the recent visit to China by Venezuelan Minister of Energy and Petroleum and PDVSA President Rafael Ramrez.
Liu did not elaborate on the content of the agreements, saying CNPC would remain low-key before any concrete progress has been made.
In order to expand business in China, PDVSA set up a branch office in Beijing on Monday.
The Zumano area has 400 million barrels of light and medium crude and 4 billion cubic feet of gas reserves, said PDVSA.
"We want China to take part as an investor and a partner," said Ramrez during his China tour.
Venezuela plans to spend US$56 billion from 2006 to 2012 to double its oil production to 5.1 million barrels a day from the current 2.6 million barrels per day.
China last year produced some 1.27 billion barrels of oil, and imported 898 million barrels.
Venezuela said last week that it expects to export 300,000 barrels of crude a day to China by 2012 from the current level of 68,800 barrels a day.
The South American country hopes to supply 15 to 20 per cent of China's oil import needs, PDVSA said in the statement.
The two companies are studying a possible refinery project in China, PDVSA said.
They have also held preliminary discussions about creating a financing fund for building infrastructure in Venezuela based on oil trade, PDVSA said. Further details were not available from either of the two companies.
CNOOC to build its first refinery
The country's largest offshore oil and gas producer, China National Offshore Oil Corp (CNOOC), signed an agreement with Houston-based WorleyParsons Energy Services LLC on Thursday to build the offshore oil producer's first refinery in Huizhou, South China's Guangdong Province.
The project will involve a total investment of 20 billion yuan (US$2.47 billion).
The move reflects CNOOC's intention to extend its business portfolio from the upstream oil and gas exploitation to the downstream refining business.
"CNOOC aims to become an integrated company covering both the upstream and downstream activities with international competence," Yao Debin, vice-president of the Huizhou refinery project management team, told China Daily on Friday.
Construction of the refinery, with a designed capacity to process 12 million tons of crude oil annually, is to start soon and will be completed by mid- 2008, according to Yao.
It will be one of the country's largest oil refineries, rivalling one of Asia's largest oil refiners Sinopec, which owns five refineries with an annual crude processing capacity of at least 10 million tons.
Yao said the Huizhou refinery's strength is its high quality of refined oil. It will also supply raw materials to petrochemical companies.