Fri, Aug 25, 2006 - Page 7 News List

Chavez to triple oil sales to China

ENERGY LEVERAGE The Venezuelan president said he wanted to make China one of his country's biggest export destinations, and reduce dependence on the US

AFP , BEIJING

Venezuela plans to more than triple its oil exports to China over the next five years, Venezuelan President Hugo Chavez said ahead of a meeting Thursday with his Chinese counterpart Hu Jintao (胡錦濤).

"On the whole, production will increase in such a way that we will manage to export half a million crude barrels [a day to China] in the five next years," Chavez told Venezuelan state television in an interview broadcast overnight.

Venezuela, the fifth-biggest exporter of oil in the world, currently delivers 150,000 barrels per day to China, compared with 1.5 million barrels it exports to the US.

Chavez, one of the world's most prominent critics of the US, repeated his intentions to make China one of his nation's biggest markets, and so lessen Venezuela's economic dependence on Washington.

"We will convert ourselves into one of the large oil exporters to the Chinese giant," Chavez said.

He said agreements would be signed with state-owned China National Petroleum Corp and China Petroleum and Chemical Corp (Sinopec) yesterday to jointly exploit his country's oil-rich Orinoco region.

Deals to be signed

Chavez said he was excited about building a strategic alliance with China and said the two nations were expected to sign nine agreements yesterday when he met with Hu.

"We are building the future. I am very heartened -- it is our fourth visit to China. Each visit is a step forward ... that is to say, a true alliance," he said.

Among the contracts expected to be signed were a deal to build 18 tankers to carry Venezuelan crude to China and 12 drilling rigs to help Venezuela boost its production capacity.

Chavez's statements backed up his country's offer earlier this month to export between 500,000 and 1 million barrels of oil a day to China if it reached a goal of producing 5.8 million barrels of crude by 2012.

Oil exports

* Venezuela is the world's fifth-biggest oil exporter.

* The country currently exports 150,000 barrels per day to China.

* Venezuela plans to more than triple such exports, President Hugo Chavez said.

* Venezuela exports 1.5 billion barrels of oil per day to the US, its biggest customer.

* Chavez was to sign deals with China yesterday to build tankers and drilling rigs to boost Venezuela's production capacity.


Chavez said that during his first day of his trip to China on Wednesday he had met with company officials from the telecommunications, oil tanker and building construction industries.

While Chavez looks to China as an alternative market to the US, observers have said the arrangement is beneficial to Beijing because it wants to diversify its imports away from the volatile Middle East.

However some Chinese analysts have questioned whether the deal would be worth it, given the higher costs associated with Venezuelan oil. Aside from the extra expense of the long distance the oil would have to be shipped, Venezuelan crude is heavier than most of the Middle Eastern varieties, making it more costly to refine.

As well as looking to broker energy deals, Chavez took time out on Wednesday to hail China's economic model as an alternative to the US capitalist approach.

Better than the moon

Chavez praised China for being able, in less than half a century, to leave behind a "practically feudal" society and turn itself into one of the world's largest economies.

"It's an example for western leaders and governments that claim capitalism is the only alternative," he said.

"We've been manipulated to believe that the first man on the moon was the most important event of the 20th century.

"But no, much more important things happened, and one of the greatest events of the 20th century was the Chinese revolution," he said.

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