Will China, India and Japan be Venezuela’s saviours?

Two reports this morning about foreign interest in Venezuela, which has been seeking private investment to exploit its oil reserves, are not too much of a stretch. Earlier this week Hugo Chavez signed a $33.5bn investment agreement with Japan, and  was said to be meeting with China yesterday.

Today Bloomberg reports PetroChina may form three oil ventures with Venezuela – citing the 21st Century Business Herald reported, which in turn cites an unnamed executive at the Chinese company.

The ventures may include an oil company in Venezuela that would be 40 percent owned by PetroChina, the newspaper said. Another refinery venture may be formed in southern China’s Guangdong province, with the Chinese company owning 60 percent, the report said. A shipping company may also be formed, with each side holding 50 percent, it said.

Then the Economic Times of India is reporting both ONGC and Reliance may each take a stake of up to 20 per cent in at least one of the three large oil fields in Venezuela’s Carabobo region, citing people “familiar with the matter”. Reuters also cites a source at ONGC who mentions the Reliance partnership.

Pdvsa, like some of its fellow national oil companies, has been used to strengthen government coffers at the expense of investing in its future production. When oil prices were high, the government used its bargaining power to force international oil companies to cede majority control of projects to Pdvsa. But the company is now in need of more investment, and with oil prices creeping up towards the $60 mark and China’s recent deals to secure oil from Russia and Brazil, these reports aren’t too difficult to believe.

Related links:

PetroChina May Form 3 Oil Ventures With Venezuela, Herald Says (Bloomberg)
ONGC plans to bid with Reliance in Venezuela – exec (Reuters)
Petróleos de Venezuela (FT)

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