China Using “Soft Power” to Lock Up Venezuela’s Oil and Assure Its Energy Security

~~By InsightAnalytical-GRL

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…)

From Bloomberg.com:

China Lends Venezuela $20 Billion, Secures Oil Supply (Update3)

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.”

snip

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.

5 Responses

  1. The ¿Venesat-1? has been up for about a year-and-a-half. It is basically the same as a DirecTV satellite.

    Venezuela has always had nationalized oil (In most countries of the world, mineral rights belong to the state–notable exceptions are U.S.A. and Canada) What changed under Chávez is the percentages in terms of the $ that stays in the country and the international oil companies take. There were some organizational and operational changes also. The international oil companies provided refining services to Vzla as well as PDVSA (public/private partnerships, if you will). Some of the transnationals, e.g., Exxon Mobil and ConocoPhillips did not like the new agreement and refused the changes, so those refineries were taken over completely by PDVSA. They then filed suit and had Citgo assets frozen in the United States. I think Vzla finally got its money back, but I don’t remember. Most of the other transnationals, e.g. Total, Chevron, BP, accepted the changes and continue to operate in Vzla. I am in no way an expert on this stuff, but I think what I wrote is pretty close to the truth.

  2. They probably have reworked the agreements as you say…
    The Chinese influence now is just another example of how they’re “encroaching” on what the West has always taken for granted.

    As in Iraq and Africa, as well…

  3. Yes, there is a mindset in the United States that goes something like this: everything we have is ours and everything you have is ours too. I think Great Britain had the same mindset until the empire imploded, as these two countries were the biggies when it came to oil. The Netherlands too, ¿no?

    It really breaks my heart to see the large-population countries that are rapidly industrializing follow the same path the United States took. I think the planet might not survive the environmental destruction of billions more people getting their turn. If only they could reject the temptation of short-term low costs. Of course, those of us who started this mess have no moral high ground whatsoever to preach or tell any other country what to do. One of the disappointments living in Vzla was discovering that most of the automobile fuel is still leaded. There is unleaded gas available, but it is slightly less inexpensive (¿something like 16¢ a gallon compared to 12¢ a gallon? I’m surely wrong on the current prices, but you get the idea.) and considered the green fuel.

  4. We’re screwed. Read this. No Really, read it:

    The Imminent Crash Of The Oil Supply
    What Is Going To Happen And Why Weren’t We Forewarned?

    By Nicholas C. Arguimbau

    Look at this graph and be afraid. It does not come from Earth First. It does not come from the Sierra Club. It was not drawn by Socialists or Nazis or Osama Bin Laden or anyone from Goldman-Sachs. If you are a Republican Tea-Partier, rest assured it does not come from a progressive Democrat. And vice versa. It was drawn by the United States Department of Energy, and the United States military’s Joint Forces Command concurs with the overall picture.

    http://www.informationclearinghouse.info/article25306.htm

  5. I left this comment on the “what’s happening on this blog” thread. But I want to post it on the most current thread.
    It’s been a long time since I’ve had much to say, but I wanted to share Carol Marin’s column in today’s Chicago Suntimes.

    “National press gets a taste of crafty Obama “

    Carol has been one of the writer’s from the get-go to try to alert MSM of the relationships between Obama, his campaign, and the truth.
    Here are the last few paragraphs of this column:

    As the Washington Post’s Howard Kurtz reported Friday, “The Justice Department’s decision to subpoena a New York Times reporter this week has convinced some press advocates that President Obama’s team is pursuing leaks to the press with the same fervor as the Bush administration.”

    James Risen is a Pulitzer Prize- winning reporter for the Times. He has refused to tell the government who his confidential sources were in writing his 2006 book, State of War: The Secret History of the CIA and the Bush Administration.

    The subpoena was approved by Obama’s attorney general, Eric Holder.

    Kurtz quotes Lucy Dalglish, the executive director of the Reporters Committee for Freedom of the Press, who argues that the message the Obama administration is sending is, “‘You leak to the media, we will get you.’”

    Perhaps, over the soup course at the correspondents dinner this weekend, the national press corps will have gotten the folks from the White House to explain how exactly this squares with “Change We Can Believe In.”

    http://www.suntimes.com/news/marin/2222418,CST-EDT-carol02.article

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