Add this to our growing list of “soft power” moves by China. This time, China is getting even closer to Hugo Chavez and Venezuela, specifically, its oil reserves. Recall that only a couple of years ago, Chavez nationalized the oil industry, including projects involving American and other foreign energy companies. (And note that Brazil’s largest oil company has also signed a deal to supply China…)
April 19 (Bloomberg) — 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.”
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.”
And, isn’t that satellite deal interesting?
“…a mutating world in transition…”
Chavez hit that one on the head.
Filed under: World News Tagged: | American oil companies in Venezuela, Brazilian oil, China Development Bank Corporation, crude oil, Hugo Chavez, nationalized oil indsustry, Orinoco Belt, Petroleo Brasileiro SA (Petrobras), soft power, Venezuelan oil