Russian sanctions on Iran to try to force them into changing their mind on their nuclear program. Chen said that in exchange they will be assured of oil from other sources.
In addition, China has also been aggressively seeking oil and other commodities supplies all around the globe. Check out the article below that business partner Roger Wiegand put together.
“China, the world’s second-biggest consumer of oil, will lend Venezuela $20 billion and form a venture to pump crude from the Orinoco Belt, President Hugo Chavez said, vowing to meet the Asian country’s energy needs.”
“The financing from China is separate from a $12 billion bilateral investment fund, Chavez said, and will pay for Venezuelan development projects. Venezuela currently sends China 460,000 barrels a day of crude oil. The oil is used to repay the Asian country for $8 billion Venezuela used from the fund for infrastructure projects. “We agreed on a huge, long-term financing plan,” Chavez said on state television on April 17. “This is a larger scope, a super heavy fund. China needs energy security and we’re here to provide them with all the oil they need.”
“Spending by Chinese companies on mining and energy acquisitions reached a record $32 billion last year as fuel demand rises in the world’s fastest-growing major economy. Venezuela, the largest oil producer in Latin America, is diversifying its export markets and seeking loans from Russia and Japan in a bid to boost output and finance social programs. Chavez expects $120 billion of investment to flow into the Orinoco Belt in eastern Venezuela in the next seven years to increase daily production by more than 1 million barrels a day.”
“State oil company Petroleos de Venezuela SA and China National Petroleum Corp. signed a joint-venture agreement in Caracas April 17 that will require a $16.3 billion investment to pump and refine heavy crude oil at the Junin 4 block of the Orinoco Belt. The exploration agreement is valid for 25 years and China National Petroleum expects about 2.9 billion barrels in extra-heavy crude oil production from the accord for 10 years.”
“The venture will spend $10.3 billion on production and $6 billion to build an up-grader to refine the heavy crude into lighter oil for export. The companies will initially produce 50,000 barrels a day in 2012 with a goal of 400,000 barrels a day in 2016, according to a statement today from PDVSA, as the Venezuelan company is known. An additional 400,000 barrels from Venezuela will increase China’s imports by about 10 percent, sizable and important in terms of mitigating the reliance on Middle East, which currently accounts for half of China imports.”
“PDVSA will hold a 60 percent stake in the block and CNPC will have to pay the Venezuelan government a bonus of as much as $1 billion to access the reserves, Oil Minister Rafael Ramirez said on April 16. A Chinese delegation led by Zhang Guobao, head of the Chinese National Energy Administration, attended the signing ceremony in Caracas after President Hu Jintao canceled a planned visit to Venezuela and Chile following an earthquake that killed more than 1,400 people in China’s Qinghai province. Hu is expected to reschedule his trip.”
“The two countries plan to build three electric plants powered by petroleum coke with a capacity of 300 megawatts each, Chavez said. Another thermoelectric plant will be built in Merida state to produce 500 megawatts, he said. Venezuela is grappling with a severe electricity crisis following a drought that dried-up reservoirs behind hydroelectric plants. The country plans to spend $6 billion this year to boost thermoelectric output. Trade between the two countries surged to $8.9 billion in 2008 from $85.5 million in 1999.”
“Chavez said that the $20 billion loan is the largest that China Development Bank Corp. has extended to a country, and will go toward funding housing, railroad, energy and agriculture projects. China built and launched Venezuela’s first satellite into orbit in 2008. China last year agreed to loan Brazil’s state-controlled oil company, Petroleo Brasileiro SA, or Petrobras, as the company is known, $10 billion, and signed a long-term supply contract with the company. “The relations between China and Venezuela extend from below the surface of the earth to outer space,” Chavez said. “We’re producing oil together and our satellite is out there in space. This is a mutating world in transition.” (Editor: China is trading USA paper for hard energy assets paying cash). -Daniel Cancel & Ying Wang @ Bloomberg.net
Chavez pillaged and stole Total and Exxon properties and refineries. He owes them millions. If he plays those games with China he will encounter a religious experience of the first order. We are pleased to see China take a position here. They will teach Mr. Chavez a few things -Editor
Find out more about Roger Wiegand’s work at WeBeatTheStreet. Go to Miningstocks to check out Chen Lin’s excellent trading record.
Jay Taylor
Gold Investor
Source: Jutia Group
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