MercoPress. South Atlantic News Agency

Venezuela opens fields to Chinese oil corporation

Venezuela and China signed a “preliminary agreement” for a joint company to drill for light and heavy crude in eastern Venezuela, reported the government owned Petroleos de Venezuela, or PDVSA.

Beijing and Caracas also signed an agreement to quantify and certify oil reserves in an area of the Orinoco Strip, in southeast Venezuela.

The deals were closed in Beijing by the minister in charge of China's State Development and Reform Commission, Ma Kai, and Venezuelan Energy Minister Rafael Ramirez, who also heads PDVSA.

The mixed company formed by PDVSA and China National Petroleum Corporation, or CNPC, will drill in oilfields in the area of Zumano, site of an estimated 400 million barrels of light and heavy crude oil and 4 trillion cubic feet (some 113 billion cubic meters) of gas, according to Venezuelan data.

The companies also agreed to conduct a study of area Junin 4, a 640-square-kilometer block in the Orinoco Strip, for the purpose of quantifying and certifying oil reserves, estimated at 20 billion barrels, PDVSA said.

After the preliminary study, "we will proceed to discuss a joint project for the production and upgrading of crude, combined with a project to refine in China" indicated the official joint release.

According to PDVSA, Brazil's Petrobras; China's CNCP; Spain's Repsol; India's ONGC; Iran's Petropcs and Russia's Lukoil and Gazprom, all government owned will join in the project.

Venezuela is the world's fifth exporter of crude and the United States' fourth main supplier which represents 70% of all the country's oil exports.

China is the world' second top oil importer and seeks "to broaden its pool of suppliers to meet its growing demand for energy", concludes the PDVSA release.