China in huge Venezuela oil deal

Thursday, September 17, 2009


Venezuela has announced a $16bn (£10bn) investment deal with China for oil exploration in the Orinoco river.

The move comes shortly after Venezuela signed a similar agreement with Russia, which is estimated to be $20bn (£12bn).

President Hugo Chavez said the deals would boost oil production in Venezuela by about 900,000 barrels per day.

Investors in Venezuela's oil industry have complained for months that a lack of government investment in infrastructure has hurt production.

Multi-polar world

Speaking on state television, Mr Chavez said the deal with China was over three years and that the investment would go towards developing heavy crude oil resources in the Orinoco River belt.

For President Chavez it is part of a wider effort to increase his base of bilateral partners in the oil industry.

The socialist leader often speaks of what he calls a "multi-polar world" in which Latin American countries are less dependent on Washington.

However, US companies and the US government are still the mainstay of the Venezuelan energy industry.

The Venezuelan leader will hope that these multibillion dollar deals, signed with countries which are more friendly to his "21st Century Socialist Revolution", will give him further economic independence from Washington.

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