23-08-05 With the aim of consolidating the market diversification of Venezuelan oil in Asia, Petroleos de Venezuela inaugurated the PdVSA China commercial office in Beijing, a ceremony which took place during the official visit paid by Venezuelan Energy and Mines Minister Rafael Ramirez, President of PdVSA, to China.
“PdVSA China will evaluate business opportunities in the region, both upstream and downstream, and will become the focal point for supporting relations with new strategic partners. Additionally, it will further strengthen the existing China-Venezuela solidarity alliance, to the benefit of both peoples’ social and economic development,” according to Ramirez.

In preliminary terms, potential Venezuelan oil exports to China are estimated at close to 300,000 bpd of crude and products; which is to say, some 100 mm barrels per year. This implies the monthly shipment of at least four very large crude carriers (VLCC), with an approximate capacity of two mm barrels each.
An average of 12,300 bpd was shipped to China during 2004, while during the current year to date, this average increased to 68,800 bpd, a 560 % increase.

The opening of PdVSA China is being undertaken within the context of efforts aimed at achieving international energy integration, while structuring a multipolar world that is more balanced and just. In this direction, the Venezuelan content of oil production and marketing goods and services offered, will continue to be promoted.
PdVSA China is based on the complementary features of both economies. Venezuela has oil reserves sufficient to last more than 285 years, at the current rate of production, and is the world’s fifth largest hydrocarbons exporter. On the other hand China, the world’s second largest oil importer, seeks to expand its supplier base to meet its growing energy demand. In this way, PdVSA is taking a step forward in diversifying Venezuela’s oil exports. expanding its business vision to promote integration based on equality, reciprocity and mutual benefit.

Minister Ramirez, together with his Energy and Petroleum Ministry and PdVSA entourage, is developing an intense work agenda with government and business representatives. This includes a meeting with President Ma Kai of the National Commission for the Development and Reform of the Chinese Popular Republic; He Lianzhong, Director of the Commission’s Foreign Capital Use section, and the presidents of companies such as Sinopec, China National Petroleum Corporation (CNPC), China National Oil and Gas Development Corporation (CNODC) y Zhenghua Oil, among other senior executives.
The Venezuela-China energy agenda aims at promoting further progress based on the agreements previously established in the Memorandum of Understanding on Greater Cooperation in the Energy Sector, signed by President Ma Kai and Minister Ramirez during the visit paid by Hugo Chavez Frias, President of the Bolivarian Republic of Venezuela, to Beijing in December 2004 when, together with his opposite number Hu Jintao, agreed to promote integral bilateral cooperation between the two countries.

The oil negotiations being undertaken by both parties include areas such as the long-term supply of crude and products, the migration to joint ventures of the temporary agreements for the development of Intercampo Norte (in Lake Maracaibo) and Caracoles (eastern region), the creation of a joint venture for the development of the Zumano area (eastern region), the quantification and certification of reserves, the evaluation of a possible joint development of Block Junin 4 in the Orinoco Oil Belt, the construction of a product pipeline through Colombia to the Pacific Ocean, together with shipping construction, technical assistance and the creation of a fund for the financing of infrastructure construction.