China to Secure “Oil-for-Exports” Future in South America
China rushes to secure Venezuelan crude oil imports by increasing investment
China has promised Venezuela $38 billion USD worth of infrastructure, aid, and other funding, in an effort to secure crude oil futures. China hopes to apply its middle-east “oil-for-exports” model in Venezuela, the world's eight largest oil exporter, to secure much sought after natural resources.
Currently, Venezuela is exporting 460,000 barrels-per-day to the Asian giant, but Chavez hopes to raise this number to 1 million bpd.In 2010, Venezuela agreed to send almost all of its fuel output to China for three years, in exchange for an upfront payment of $8 billion.
China is also heavily involved in developing the Venezuelan oil industry with a 400,000 bpd joint venture refinery, and a large project to develop the country's Orinoco heavy oil belt. As Chinese oil imports increase, Venezuela's exports to America have dropped by a third to 827,000 bpd, however President Chavez has stated that he does not intend to suspend oil supplies to the US.
