Aug 29, 2006
Venezuela agrees $1.3bn tanker deal with China
(Lloyds List) -"The Chinese and Venezuelan governments have signed 12 energy agreements including a memorandum of understanding to build 18 tankers worth $1.3bn.
China State Shipbuilding Corporation (CSSC) and China Shipbuilding Industry Corporation (CSIC) will build the very large crude carrier tankers as part of a $3bn fleet expansion plan being pursued by Venezuelan state-owned oil giant, PDVSA.
Chinese shipyards will also be involved in the development of the shipbuilding industry in Venezuela providing technical assistance to Venezuela's shipbuilding company, Dianca.
PDVSA and Dianca are working to develop a shipyard facility with Brazilian engineering group, Andrade Gutierrez, as part of its plan to reduce its reliance on international shipowners and shipyards.
The yard, which will be able to build VLCC tankers and offshore platforms, is to be built in the east of the country. Further integration in the energy sector includes the acquisition of 13 drilling rigs to boost Venezuelan oil exploration under its plan to increase production to 5.8m barrels per day by 2012.
Some 195 Venezuelan engineers will travel to China over the next two years, during the construction of the rigs to enable the future construction of this equipment in Venezuela.
In the short-term exports to China are set to double from 150,000 bpd to 300,000 bpd. This figure is set to rise to 500,000 bpd under the terms of the agreement, which will account for $1bn per year in the Venezuelan effort to diversify its dependence on the US as the largest importer of Venezuelan oil.
'China is one of the biggest consumers of oil in the world while Venezuela is one of the biggest producers, so both countries are absolutely complementary,' said Venezuelan president Hugo Chávez.
As well as tying up important energy supplies from PDVSA, China National Petroleum Corp has gained access to the world's largest oil reserves.
China's state-owned oil company has been awarded Block 4 of the Junin fields in the Orinoco belt. Perforation and evaluation of the block is set to begin in October this year and will end in the second quarter of next year.
Production is estimated to reach as much as 200,000 bpd in the next four years.
Joint-venture companies will also be formed to operate the Caracoles and Intercampo Norte fields in the area of Zumano. Furthermore, Sinopec has signed an MoU to operate the Posa field in the Gulf of Paria.
Total production by Chinese companies in Venezuela is going to reach 400,000 bpd by 2011".
