China may be new Venezuela oil partner

A tanker truck refills a Sinopec gas station in Beijing.

TEXT OF STORY

Scott Jagow: A couple days ago, we told you about Venezuela's president seizing control of his country's oil fields. Hugo Chavez demanded oil companies sign a parting agreement, and then get the heck out. ConocoPhillips and ExxonMobil said no. But they're still probably gonna leave the country. Venezuela is taking over, deal or no deal.

So with the U.S. companies on the way out, guess who might be coming in?China, according to a Bloomberg story today. We looked into it from our America's Desk at WLRN. Here's Dan Grech.


Dan Grech: Venezuela's state oil firm needs the help of outside companies to get its heavy crude oil out of the ground. Problem is, they just alienated ConocoPhillips and ExxonMobil, two firms that specialize in that sort of thing.

Oil analyst Fadel Gheit is with the Oppenheimer Group:

Fadel Gheit: Basically, the Chinese want and need the oil, and Venezuela want and need an international partner. So it makes sense. The devil's in the detail, though.

Oil expert Jorge Pinon is at the University of Miami. He says if, as reported, China Petrochemical Corp or the state-owned Sinopec Group enter Venezuela, they'll have their hands full.

Jorge Pinon: The Chinese do not have any experience on heavy oil production. None!

Still, China seems willing to take the gamble, says Florida International University's Ed Glab.

Ed Glab: The Chinese got a lot of money sittin' out there in banks. So they can certainly afford the investment. Their economic success depends upon a secure supply of fuel.

Venezuelan President Hugo Chavez is traveling the world looking for other partners. Today, he's in Russia. His next stop? Iran.

I'm Dan Grech for Marketplace.

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