“Venezuela has raised the socialism flag after having lived almost two centuries amidst the hurricanes of capitalism, the most ferocious, dependant and colonialist capitalism, as an empire’s backyard. We Venezuelans refuse to be any empire’s backyard. We will turn Venezuela into a world power”. These were the words of Hugo Chavez, President of the Bolivarian Republic of Venezuela, during the signing ceremony of the final Minutes of the VI Meeting of the Venezuelan-Chinese Joint Committee.

The Venezuelan President highlighted the particularities of the Chinese socialist model, including that it was built by Chinese people and it responds to the needs of the nation. This model does not copy any other model, and this Asian country has emerged as a great world power. “China is the best example of the fact that you do not need to be an empire to be big, you do not need to run over other peoples to be a world power”, said the leader of the Bolivarian Revolution.

The agreements signed include the creation of a $6 billion historical investment fund intended to finance development projects in Venezuela. It is an instrument that foresees a $4 billion contribution from China, and a $2 billion contribution from Venezuela. It will be renewed every three years, which means a contribution of close to $20 billion in less than one decade.

Oil Supply
China and Venezuela have achieved significant progress in the past years regarding oil matters. Before, hydrocarbons supply between both nations was non-existent. Venezuela never sold oil to China because this nation was located too far away.

Venezuela currently sends China 350 thousand barrels per day of crude and derivatives. Moreover, there is a commitment to raise that number to 500 thousand barrels per day next year, and to reach 1 million barrels per day by 2010-2011.

On its part, the quantification and certification agreement in Junin 8 is very important because this Block has approximately 40 billion barrels in reserves, twice as much as the U.S. has in its territory. This means that there is enough oil in Junin 8 to supply China and other sister nations in the world throughout this century.

With regards to the agreement on crude transportation, this agreement will allow a considerable reduction of transportation costs since intermediaries that significantly raise real transportation costs will not be present.

President Chavez indicated that both China and Venezuela are very interested in making quick progress in the following strategic projects: reaching a 1-million barrel production in Venezuelan territory, building three large refineries in China, and creating our own oil tanker fleet.

“Relations between China and Venezuela should be at the highest strategic level, and in the front lines of the battle field. We are now carrying it out. All these agreements allow us to make progress in this direction”, said the Venezuelan President.

EPIGRAPH
“I pay homage to the great leader Mao Tse-Tung, a fighter, warrior, ideologist, and an inspiration for the people of China, the only China in the world.”
President Hugo Chavez

BOXES
Agreements signed in the VI Joint Committee
Fourteen agreements were signed and four of them correspond to the hydrocarbons sector:

• Agreement between PDVSA and Sinopec for the quantification and certification study of the existing oil fields in the Junin 8 Block of the Orinoco Oil Belt.
• Agreement between PDVSA and China National United Oil Corporation (Chinaoil), to supply fuel oil to the Chinese market.
• Memorandum of Understanding between PDVSA and China National Petroleum Company (CNPC) to enlarge energy cooperation.
• Alliance agreement to Transport Crude and Products between PDV Marina and Petrochina International Company.

Other agreements

• Crude and fuel oil supply. Venezuela hopes to increase its crude exports to China to 1 million barrels per day in 2012.
• Creation of the Investment Fund between the People’s Republic of China and Venezuela. China will contribute $4 billion and Venezuela will contribute $2 billion to promote development projects.
• Quantification and certification of 36 billion barrels of Original Petroleum in Site in the Block Junin 4 of the Orinoco Oil Belt.
• Trade agreement between China National Petroleum Corporation (CNPC) and Petroleos de Venezuela, S.A. (PDVSA) to purchase 13 well drilling rigs. This includes training of 200 Venezuelans in China to support the manufacturing of drilling equipment in Venezuela.
• Construction of ships between PDVSA and the Chinese company Rongshen Shipyards.