Chavez talks oil with China

Jocelyn Ford Aug 22, 2006

SCOTT JAGOW: The president of Venezuela loves selling oil to the US. We’re his No. 1 customer. But Hugo Chavez arrived in China today hoping to make that country No. 2. More now from Jocelyn Ford.


JOCELYN FORD: Venezuelan President Hugo Chavez has promised to boost oil exports to China this year by 30 percent this year.

At the moment China buys just a trickle. Venezuela sells over half of its oil to the United States, aa country it doesn’t get along with.

Oil analyst Scott Weaver says while in China he wants to cement the partnership with other deals.

SCOTT WEAVER:“The bigger interest is joint projects, joint development of oil and gas reserves. They would guarantee a buyer in China.”

It might help China reduce its dependence on the Middle East.

But though such a deal might make political sense, the economics aren’t as attractive.

Venezuelan oil would be expensive to ship to China. That’s because super tankers are the best way to transport it here but they’d have to pass through the Panama Canal. They’re just too big for that.

In Beijing, I’m Jocelyn Ford for Marketplace.

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