Venezuela-China sign $16bn oil deal

Chavez says deal, along with another with Russian firms, will produce 900,000 barrels.

    Chavez, left, announced the oil deal with China
    during a visit to a school [AFP]

    Venezuela announced last Saturday that it had also signed a similar deal with a Russian consortium during Chavez's recent visit to Moscow.

    Russian investment

    The deal will see the group of five Russian companies invest more than $20bn over three years, and gives them rights to drill for oil in the Junin 6 field, which is estimated to hold 53 billion barrels of heavy crude.

    in depth

      Chavez's 'historic' China strategy
      People and Power: Total Control
      Witness: Red Oil

    "Adding both [the Russian and Chinese investments] it comes to $36bn for the next three years with the objective of producing in a partnership with Venezuela - with PDVSA holding most shares - 900 thousand barrels per day of crude, nearly a million," Chavez said.

    "This good crude will be negotiated along with the Russians by Russian companies and Chinese companies."

    Venezuela says it has proven oil reserves of about 142.3 billion barrels, but some experts estimate that the Orinoco basin could hold an additional 235 billion barrels.

    Venezuela, the world's 11th-largest oil producer, relies on its vast reserves for 93 per cent of exports and nearly half the government's budget.

    But this has been hit as world oil prices have fallen 50 per cent from last year's peak, to trade at $72.51 a barrel on the New York Mercantile Exchange on Wednesday.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    'We were forced out by the government soldiers'

    'We were forced out by the government soldiers'

    We dialled more than 35,000 random phone numbers to paint an accurate picture of displacement across South Sudan.

    Interactive: Plundering Cambodia's forests

    Interactive: Plundering Cambodia's forests

    Meet the man on a mission to take down Cambodia's timber tycoons and expose a rampant illegal cross-border trade.

    Pakistan's tribal areas: 'Neither faith nor union found'

    Pakistan's tribal areas: 'Neither faith nor union found'

    Residents of long-neglected northwestern tribal belt say incorporation into Pakistan has left them in a vacuum.