China and Venezuela Sign $2.2 Billion Deal to Boost Oil Output

Venezuelan state oil company PDVSA signed a US $2.2 billion investment deal Thursday with China’s National Petroleum Company (CNPC) to increase production by 227 thousand barrels per day (BPD).

By Lucas Koerner
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PDVSA President Eulogio del Pino signs agreement with his Chinese counterpart. (AVN)
PDVSA President Eulogio del Pino signs agreement with his Chinese counterpart. (AVN)
Caracas, November 18, 2016 (venezuelanalysis.com) – Venezuelan state oil company PDVSA signed a US $2.2 billion investment deal Thursday with China’s National Petroleum Company (CNPC) to increase production by 227 thousand barrels per day (BPD). 
“The alliance between our oil companies has to continue bearing fruit … this alliance initiated by our comandante Hugo Chávez  [is] a strategic association in all areas, cultural, social, energy, economic,” declared President Nicolas Maduro during the signing ceremony in Miraflores palace. 
Among the deals is a joint venture to develop China’s Jie Yang refinery, which will process 400 thousand barrels per day (BPD), 70 percent of which will come from Venezuela. PDVSA will retain a 40 percent stake in the project, while CNPC will have 60 percent participation. 
Another agreement will see a $225 million joint investment in the mixed firm Petrozumano, aimed at expanding output by 15,000 thousand BPD. 
The state companies also agreed to invest a further $500 million in new technologies for the Petrourica mixed firm, which will yield a 30,000 BPD increase. Another plan will involve the development of a new pilot project for extracting Venezuela’s extra heavy crude, which is slated to boost output from 160 thousand to 230 thousand BPD. 
Lastly, the two countries signed off on a project to rehabilitate 500 wells of light crude, amounting to 42,800 BPD in new output. 
“We’ve agreed on very important, realistic, concrete, and verifiable goals for increasing production that have the financial backing of credit lines worth [US]$9 billion dollars,” Maduro added.
The head of state indicated that the two countries aim to increase joint production by 800,000 BPD in the coming years. 
CNPC is China’s biggest oil and gas company and is one of the world’s largest contractors in the engineering and oil servicing sectors.