Venezuela, China signed accord on joint oil firm

Venezuela and China have signed an accord to create a joint company that will pump oil in eastern Venezuela, the government said.

The venture between state companies Petroleos de Venezuela S.A. (PDVSA) and the China National Petroleum Corp. will extract oil from the area of Zumano in the state of Anzoategui, the state-run Bolivarian News Agency reported Thursday. The area has about 400 million barrels of oil in estimated reserves, as well as natural gas, the agency said.

Both countries also agreed to build tanker ships through Venezuela's Diques y Astilleros Nacionales C.A. and its Chinese counterpart, China Shipbuilding Industries Corp., the state news agency said. Other details of the agreement were not immediately available.

Venezuela, the world's fifth largest oil exporter, announced several days ago that PDVSA had opened an office in China, the company's first in Asia.

It also recently announced plans to acquire 42 new tankers in the coming years to increase its exports to Asia.

Venezuelan President Hugo Chavez has promoted a closer relationship with China, India and other Asian countries in an effort to secure new markets for oil and reduce dependence on the United States, currently the top buyer of Venezuelan crude, reports the AP.

A Petroleos de Venezuela spokesman said the venture would be the first exploration and production project under the country's new hydrocarbons law, which stipulates majority control of such ventures by the Venezuelan company. Petroleos de Venezuela in January offered China National the Zumano fields, which are now producing about 25,000 barrels of oil a day.

``We want China to participate as an investor, as well as a partner'' in oil-development projects, Rafael Ramirez, Petroleos de Venezuela's president and Venezuela's oil minister, said in Beijing as he concluded a visit to China.

Venezuela plans to spend $56 billion through 2012 to double oil production to 5.1 million barrels a day from about 2.6 million barrels currently.

The two companies also are studying a possible refinery project in China, Petroleos de Venezuela said. China may also finance infrastructure projects in the South American country, the company said, informs China Knowledge.