Venezuela's Oil Exports to China to Reach 300,000 Barrels of Oil Per Day

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Researched by Industrialinfo.com (Industrial Info Resources; Houston, Texas). PDVSA, Venezuela’s state-owned oil company said that, according to estimates, Venezuela will export 300,000 barrels of oil per day to China from the end of 2006 until 2012. This nearly doubles the amount it currently ships. According to estimates, the company will spend $56 billion doubling its oil production to reach upwards of 5.1 million barrels per day.

In November 2005, representatives of PDVSA signed a contract to supply fuel to China’s National Petroleum Corporation (CNPC) for one year. According to Venezuelan President Hugo Chavez´s declarations in December 2005, the world's fifth-largest oil exporter is willing to diversify its export market away from the United States by expanding into new markets specifically into Asia.

Current Supplies

Venezuela currently ships 100,000 barrels of crude oil and 60,000 barrels of fuel oil per day to the China National Petroleum Corporation. In accordance with the Venezuelan president’s future expectations, Chavez expects that the total oil exports to China would reach nearly 300,000 barrels a day by the end of 2006.

Venezuela also plans to expand its fleet of oil tankers as well as building pipelines with access to the Pacific Ocean so that it can ship more oil and gas to Asian countries such as China and India.

Other Projects

Oil companies from both China and Venezuela are co-investing in the building of new oilfields in Venezuela. China National Petroleum Corporation (CNPC), PetroChina’s parent company, signed an initial agreement last year with PDVSA, to develop and manage Venezuela's Zumano oilfields in the eastern part of the country. According to Rafael Ramirez, the current president of PDVSA and also the Venezuelan Minister of Energy and Petroleum, the Zumano area has about 400 million barrels of light and medium crude as well as 4 billion cubic feet of gas reserves. In order to enhance their business connections in China, PDVSA set up a branch office in Beijing in August 2005.

Overall, China produced 1.27 billion barrels of oil while it importing 898 million barrels during 2005. According to PDVSA, Venezuela hopes to supply 15% to 20% of China's overall need for oil imports by 2012.

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