Venezuelan Projects to Increase Oil Production and Exports to China

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Venezuela’s state-owned company, PDVSA, aims to produce an extra 520,000 barrels per day of heavy crude in the Orinoco Belt by 2012. This increase in production will result from developments through exploration and the discover of new production methods, a $15.3 billion investment towards the project, and even through new developments in technology that further upgrade extra-heavy crude onsite from an API grade of 8 to an API grade of 22.

Authorities from PDVSA’s research and development subsidiary, Intevep, stated that new thermal exploration and production processes will be used. These have to do with new methods for heavy oil upgrading that involve the increase of the conversion level capacity of a catalytic process and the addition of small quantities of water (water injection) during the feeding phase. This process of upgrading technology for heavy/extra-heavy oils is part of several studies carried out throughout an alliance between PDVSA.Intevep, UOP LCC, and Foster Wheeler, USA.

At the same time, Intevep, together with France’s Research and Development Institute known as Axens (Paris), are developing a refining technology called HDH Plus, which is used to convert heavy oil and extra heavy crude into products such as gasoline and diesel fuel. For details view related May 11, 2006, news article - PDVSA’s Investment to Improve the Puerto La Cruz Refinery in Venezuela.

Venezuela is forging new links with China

Venezuelan President, Hugo Chavez, declared that Venezuela will be exporting 500,000 barrels of oil per day to China within the next five years. During his visit to Beijing, Chavez secured a number of deals and signed agreements with China to strengthen their relationship as part of his governmental efforts to create a “multipolar” world to offset the U.S hegemony. The agreements which aim to boost China’s investment in a oil-rich Venezuela will be oriented towards creating joint projects not only in petroleum, but also telecommunications, farming, and railways. The Venezuelan government would create joint ventures with Chinese oil companies to produce and export crude from Venezuela's Orinoco basin as part of a larger energy cooperation plan. Also, China would help Venezuela build a petrochemical plant within the massive Amuay oil refinery located in western Venezuela.

All these recent developments are designed to increase oil sales to China as Venezuela looks to acquire more customers from Asia, and as China desires to gain more access to Latin American energy supplies to fuel its booming economy.

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