Venezuelan President Nicolás Maduro and Chinese President Xi Jinping met in Beijing last week to sign two huge oil investment deals.
China Petrochemical Corp., or Sinopec, reached a deal with Venezuelan state oil giant Petroleos de Venezuela SA (PDVSA).
They’ll jointly develop Venezuela’s Junin 1 field in the Orinoco Oil Belt. The project is a $14 billion investment and will have an output of 200,000 barrels per day, the Wall Street Journal reported.
In a separate deal, China National Petroleum Corp. (CNPC) agreed to develop another $14 billion project in the Junin 10 block of the Orinoco Oil Belt, also in partnership with PDVSA, which will produce 220,000 barrels per day.
Venezuela claims the largest proven oil reserves in the world. It’s the third largest oil supplier to China.
Under a deal struck by former President Hugo Chavez, Venezuela ships 600,000 barrels of oil per day to China — equivalent to one fourth of its total crude exports.
That astounding figure will rise to 1 million barrels per day within two years, said Venezuelan Oil and Mining Minister Rafael Ramirez.
Some of the oil will go toward repayment of loans from China.
In addition to the $28 billion oil development deals, the Export-Import Bank of China will offer Venezuela’s state petrochemicals company Pequiven $390 million in loans to develop new port facilities.
Earlier this month, Malaysia’s Petronas quit the Petrocarabobo project in Venezuela’s Orinoco Oil Belt due to disagreements with PDVSA and Venezuelan government.