China, Venezuela agree to speed up increased oil shipments

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Apr. 13 -- Venezuelan President Hugo Chavez and his Chinese counterpart Hu Jintao, have agreed to bring forward the starting date of long-planned increased Venezuelan oil exports to the East Asian nation.

Apart from advancing the date of stepped up exports, however, Chavez's visit to China last week did not achieve any new break-throughs for his country, cash-strapped due to high social expenditures and the worldwide decline in oil prices over the past year.

"I proposed that, given the global situation, we study the possibility and we agreed to move up the target [date] set in the strategic accord for 2013," Chavez said, adding that the extra shipments will begin in 2010.

During his visit, Chavez and Hu also held talks on the investment needed from China to reach the long-planned target of 1 million b/d, as well as the launch of a joint venture for oil transport, and construction of a Venezuelan refinery in China.

"Those three top strategic objectives already justify the working visit to China, but we have other political and geo-political interests to discuss with President Hu Jintao," Chavez said after arriving in Beijing.

According to Chavez, the goal of shipping 1 million b/d to China is reachable since his country plans to divert much of the current 1.5 million b/d it sends to the US.

"We're diversifying our oil business," Chavez said. "Even though we're a small country, we're an oil giant and China doesn't have the reserves necessary to meet its needs," he said, adding that "God put the oil that China needs for the next 200 years in Venezuela."

During the visit, Venezuela's Energy and Mines Minister Rafael Ramirez, along with top executives of state-owned Petroleos de Venezuela SA, met with leaders of Chinese state-owned China National Petroleum Corp. and Sinopec to discuss current and future cooperation.

Venezuelan officials said the talks also took up the idea of a joint refinery project on Chinese territory capable of processing Venezuelan heavy crude into fuel and other products.

Following the Venezuelan leader's visit, CNPC Pres. Jiang Jiemin said the state firm would submit a plan to set up joint venture refinery with PDVSA in Guangdong province. Jiang said the refinery, which will process 20 million tonnes/year of oil, will be owned 51% by CNPC and 49% by PDVSA.

The talks between the two leaders largely reiterated discussions the two sides have been having for some time on the ways they can cooperate on a variety of oil developments.

In September 2008, Venezuela and China signed several accords, including one agreement for a joint study with Sinopec the construction of an refinery in Cabruta, northern Venezuela, to process heavy crude from the Orinoco heavy crude belt.

The signed documents also included a contract for the supply of crude and fuel oil between PDVSA and PetroChina as well as agreement for the construction of four oil tankers for the Venezuelan-Chinese company CV Shipping.

In May 2008, Chinese state media reported that CNPC subsidiary PetroChina entered into a joint venture agreement with PDVSA to build a 400,000 b/d refinery in Guangdong province, configured to process Venezuelan heavy oil.

Under the agreement, witnessed by Chavez and Chinese Vice Premier Hui Liangyu, the crude is to be sourced from the Junin 4 block in the Orinoco belt.

At the time, officials said that the joint refinery, Venezuela's first such investment in China, would advance Chavez's goal of shipping to China 1 million b/d of oil by 2011, or 13% of current Chinese oil demand.

Reports vary on just how much oil Venezuela actually ships to China. Last May, Ramirez said shipments amounted to 500,000 b/d of oil, while Chinese state media reported 380,000 b/d—300,000 b/d of products and 80,000 b/d of crude.

Contact Eric Watkins at hippalus@yahoo.com.

Related Articles

PBF Energy, PBF Logistics make management changes

12/12/2014 Matthew Lucey, currently executive vice-president of PBF Energy Inc., will succeed Michael Gayda as the company’s president. Todd O’Malley, current...

Repairs under way at ORPIC’s Muscat refinery

12/11/2014 Oman Oil Refineries & Petroleum Industries Co. (ORPIC) said it plans to resume operations at its 106,000-b/d Mina Al Fahal refinery near Muscat...

Phillips 66 advances plans for splitter at Sweeny refinery

12/11/2014 Phillips 66 has filed an application with state regulators for a permit to build a condensate splitter at its 247,000-b/d Sweeny refinery in Old Oc...

Samref wraps Yanbu refinery revamp

12/11/2014 Saudi Aramco-Mobil Refinery Co. Ltd. (Samref), a 50-50 joint venture of Saudi Aramco and ExxonMobil Corp. subsidiary Mobil Yanbu Refining Co. Inc.,...

BPCL adds petrochemicals to Kochi refinery expansion

12/09/2014 Bharat Petroleum Corp. Ltd. (BPCL), Mumbai, plans to diversify into petrochemicals production as part of the ongoing integrated expansion and upgra...

Moody's: E&P spending to dip as crude oil prices slide

12/08/2014 Weakening crude oil prices will cut exploration and production spending by independent producers in the US next year and make integrated oil and ga...

Firms' third-quarter earnings climbed amid lower crude oil prices

12/08/2014 A sample of 58 oil and gas producers and refiners based in the US recorded a combined 38% jump in profits for this year's third quarter compared wi...

Reliance expands desalination plant at Jamnagar refinery

12/05/2014 Reliance Industries Ltd. (RIL), Mumbai, is scheduled to receive proprietary PX technology from Energy Recovery Inc., San Leandro, Calif., as part o...

Start-up continues at Abreu e Lima refinery

12/05/2014 Petroleo Brasileiro SA (Petrobras) has initiated the start-up of furnaces in the atmospheric distillation unit at its Abreu e Lima refinery (Rnest)...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected