China has financed the construction of a new oil blending plant in Venezuela that will boost the country’s flagging oil production by 120,000 bpd, IHS Markit reports, citing an investment of US$3 billion, provided by China’s CNPC, PDVSA’s partner in the Sinovensa venture that will operate the new plant.
The news could turn into yet another reason for disgruntlement in Washington with Beijing. As their trade dispute drags on, despite various reports of a new thawing in relations after the latest exchange of tariffs, China has openly continued to provide support to the Maduro government.
Earlier this month, Reuters cited a statement by Venezuelan President Nicolas Maduro about plans to boost the production of Sinovensa by 65,000 bpd. Sinovensa is 49-percent owned by the Chinese state giant and 51-percent owned by PDVSA. It currently produces 100,000 bpd in the Orinoco belt. The crude is a medium grade of the Orinico superheavy that’s then mixed with light crude to make the Merey blend, which, along with other medium grades, are in high demand among Asian refiners, Reuters noted in its report.
Also last month, in response to a warning by National Security Advisor John Bolton for China and Russia to stop helping Maduro, China’s Foreign Ministry spokeswoman said Washington should stop “bullying” Venezuela.
"China urges the US to... let the Venezuelan people decide their own future and immediately stop the bullying actions of suppressing other countries at every turn," Hua Chunying said.
The latest news suggests that China has no intention of changing course with regard to Venezuela no matter what the U.S. decides to do in response. And it seems it is not the only one: India, according to IHS Markit shipping data, still buys Venezuelan oil in defiance of U.S. warnings. The average import rate since June has been about 450,000 bpd. That’s a solid part of Venezuela’s total production, as calculated by OPEC secondary sources. For July, the figure stood at 742,000 bpd.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- Canadian Oil Prices Jump On Crucial Pipeline Breakthrough
- Natural Gas Prices Poised For Dramatic Price Increase
- A Perfect Storm Is Brewing For US LNG
