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China and Venezuela to tap oil

By Alex Kennedy (Shanghai Daily)
Updated: 2007-03-26 10:37

China and Venezuela plan to form joint ventures to drill in the South American county's heavy-crude belt and build three refineries for the oil in China.

State oil company Petroleos de Venezuela SA and China National Petroleum Corp, the country's largest oil producer, may also build tankers to ship the Venezuelan crude to China, President Hugo Chavez said, according to a statement yesterday from the Communications and Information Ministry.

The two oil companies began exploratory drilling in the Junin 4 block, one of 27 undeveloped tracts in the heavy oil belt, in October.

"The United States as a power is going down and China is going up," Chavez said, according to the statement. "China is the market of the future."

Chavez, speaking in Caracas, said Venezuela will diversify its oil exports to ease dependence on the US market, where Venezuela ships about 1.5 million barrels a day, Bloomberg News reported. Chavez reiterated Venezuela's goal to boost oil exports to China to one million barrels a day by 2012 from about 150,000 barrel today.

Separately, China Petroleum & Chemical Corp is drilling an oil well in southwest China that at 8,875 meters is the deepest in Asia, Xinhua reported yesterday, citing Zhang Xiaopeng, deputy chief engineer of the company's Southwest China oil and gas unit.

Sinopecinvested 300 million yuan (US$38.8 million) in the "Chuanke No. 1 Well" in westernSichuan, the news agency reported. The drilling is expected to be completed in 676 days and has progressed 100 meters in the first four working days since March 20.

Chinese scientists hope, through the project, to learn more about oil and natural gas in rock layers more than 7,000 meters deep.