PETROLEOS de Venezuela SA, the state-owned oil company, and China National Petroleum Corp will invest more than US$10 billion to produce oil in the Faja del Orinoco region and refine at least some of it in China.
The venture may produce as much as a million barrels a day, Rafael Ramirez, the Venezuelan minister of energy and oil, said in an interview on Tuesday.
"We have an agreement that includes the possibility that CNPC would produce a million barrels of oil, basically in the Faja," Ramirez said. The projects will be financed by "our own capacities," he said at the meeting of the Organization of Petroleum Exporting Countries in Vienna.
President Hugo Chavez has pledged to increase exports to China as part of his effort to reduce reliance on the US market, Bloomberg News said.
The plan by CNPC is the biggest announced in the South American country since Venezuela drove out ConocoPhillips and Exxon Mobil Corp on June 26 by changing the terms of multibillion-dollar joint ventures.
The Beijing-based firm has been certifying reserves in the Junin 4 block of the Faja, one of the world's richest oil regions.
The Venezuelan portion of the venture will be owned 60 percent by the Venezuelan company and the rest by the Chinese firm and will include construction of three refineries in Venezuela, according to a statement on the Website of Petroleos de Venezuela.
The Venezuelan company is also cooperating in the construction of three refineries in China, Chavez said on Monday. That portion of the venture will be majority-owned by CNPC, Ramirez said.
The two companies will also split equal shares of a transport joint venture, Ramirez said.