Venezuela and China Plan $10 Billion Heavy Oil Venture

Petroleos de Venezuela SA, the state-owned oil company, and China National Petroleum Corp will invest over $10 billion to produce oil in the Faja del Orinoco region and refine at least some of it in China.

The venture may produce as much as a million barrels a day, Rafael Ramirez, the minister of energy and oil said. “We have an agreement that includes the possibility that CNPC would produce a million barrels of oil, basically in the Faja.”

President Hugo Chavez has pledged to increase exports to China as part of his effort to reduce reliance on the U.S. market and to cement ties with countries with what he says are compatible ideologies.

China National’s plan is the biggest announced in the South American country since Venezuela drove out ConocoPhillips and Exxon Mobil Corp. earlier this year.