According to Bloomberg News on May 10, Venezuela recently signed an agreement with China. The two parties will build a joint venture, which is responsible for exploring oil in Orinoco Oil Belt in Venezuela to feed the 400,000-barrel-refinery to be built in China. As the official Venezuela report showed, the big bill between China and Venezuela totaled US¡ç

2 billion, equivalent to RMB14 billion. 

Zhou Jiping, Deputy General Manager of China National Petroleum Corporation, and Rafael Ramirez, President of Petroleos de Venezuela S.A., signed the cooperative agreement at the local time on May 9. Vice Premier Hui Liangyu, who was on the official visit to South America, attended the singing ceremony. Venezuelan President Hugo Chavez said that the two sides would explore the "Junin4" region in the Orinoco River Basin where oil reserves had been proved by PetroChina. 

Build a 400,000-barrel-refinery in South China 

The new refinery to be built in South China is going to operate in 2013 with a daily output of 400,000 bpd. By then, the joint venture will provide all crude oil required by the refinery, revealed a board member of the joint venture.  

Board members of the two companies all showed the new refinery will not use high-sulfur, low-quality and asphalt-like Orinoco oil, a type of boiler fuel Venezuela once sold at a very low price. 

Aim at building long-term business partnership 

Professor of Political Economy, Venezuela Central University Petrovsky believed that China-Venezuela cooperation is not short-term interest relationship but economic cooperation with political significance. Both sides aimed at building long-term business partnership. 

To meet rapid economic development, China has always been searching for partners on energy import and export. The International Energy Agency once pointed out on January 16 that China¡¯s oil consumption this year is expected to increase by 5.3%. However, the latest statistics result from UK Petroleum World showed that China¡¯s oil consumption in 2006 has grew by 6.6%.

Last year, Venezuela obtained US$4 billion of development fund from China, and in return, doubled its oil export to China. The development fund provided by China will also be applied in building a drill pipe manufacturing enterprise specially serving oil industry, a steel enterprise, some agricultural projects and 10 colleges and universities.

Venezuela has long been committed to the diversified development of the energy market to reduce its dependence on the United States, the largest buyer. In 2004 when Venezuela President Hugo Chavez has yet to give priority to oil export to Asia, oil export to China from Venezuela is 12,300 bpd. But now, the figure has reached 300,000 bpd.