(Business News Americas) - "Venezuela's state oil firm PDVSA and China National Petroleum (CNPC) will form an E&P and upgrading JV to cover three blocks in the Orinoco belt, newspaper El Universal quoted PDVSA president Rafael Ramírez as saying.

PDVSA will hold 60% of the JV, according to Ramírez, who also is the country's energy and oil minister.

The three blocks are: Junin 4, where CNPC and PDVSA have been doing reserve assessment work since 2006 and where production is due to average 200,000b/d; MPE3, which is due to produce 200,000b/d; and a block in the Carabobo section of the Orinoco with output of some 400,000b/d.

Venezuela aims to send 1Mb/d of oil to China in 5-7 years with roughly 800,000b/d coming from the Orinoco extra-heavy crude belt, BNamericas reported earlier this week. Orinoco now produces roughly 600,000b/d at four existing JVs.

Some PDVSA sources said the Orinoco production increase most likely will require implementation of the experimental technology known as MIS, a form of onsite upgrading developed by Intevep, PDVSA's R&D unit. MIS can take the extra-heavy crude at 7 degrees API, upgrade it to 20 degrees-plus API and then transport it either to a refinery or an upgrading unit.

Sinovensa already has an upgrading unit that can process 120,000b/d of extra-heavy crude".