Chavez Inks $4 Billion Development Deals With China
President Hugo Chavez of Venezuela
Venezuelan President Hugo Chavez meets with representatives from China's Citic Group and the Industrial & Commercial Bank of China (ICBC), the world's largest bank.
President Hugo Chavez gives his approval for $4 billion dollars of contracts with China.
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Chavez Inks Development Deals With China; Suspends Nuclear Program
By Ezequiel Minaya Of DOW JONES NEWSWIRES
MARCH 16, 2011, 12:36 A.M. ET
CARACAS (Dow Jones)--Venezuela signed several development deals Tuesday worth a total of $4 billion with China's Citic Group and the Industrial & Commercial Bank of China for projects in the oil sector, mining, finance and construction in the South American nation.
A Chinese delegation headed by Citic Group President and Vice Chairman Tian Guoli met with Venezuelan President Hugo Chavez and his Cabinet in Caracas.
"We have signed the birth certificate of what will be a giant; a joint venture between (Petroleos de Venezuela) and Citic Group," Chavez said of one of the newly signed accords.
During his televised comments, Chavez also announced that he was suspending Venezuela's fledgling nuclear power program in the wake of last week's earthquake and tsunami in Japan which has led to a nuclear emergency.
Tokyo Electric Power Co. (9501.TO) is battling to avert a nuclear disaster at its Fukushima Daiichi nuclear power station, which has suffered several explosions after cooling system failures caused reactors to overheat.
"There is no doubt that this has altered in a strong way the development plans of nuclear energy throughout the world," Chavez said of the unfolding crisis in Japan.
Venezuela reached an agreement with Russia last year to build the South American country's first nuclear plant, a move that created unease in Washington.
The latest agreements between Venezuela and China continue the strengthening of ties between the nations.
To support Venezuela's expansive social programs, Chavez has turned to resource-hungry China for assistance on everything from financing to housing and machinery. Last year, Venezuela received a $20 billion credit line from the China Development Bank for housing, which it is partially paying back with oil shipments.
On Tuesday, Chavez assured China that it could count on Venezuela for its energy needs. He said that in three years he hoped to up oil shipments to China to a million barrels a day. Venezuela, one of the world's largest oil producers may be hard pressed to meet the goal, having been plagued in recent years by declining production and rising debt.
Production in 2010 came in around 2.78 million barrels a day, according to Venezuela's oil ministry, below the roughly 3 million barrels a day that officials had been claiming throughout much of the year.
Before these latest accords, Citic Group was already slated over the next two years to build 40,000 housing units in Venezuela, which is suffering from a long-standing housing storage.
Last month, state-owned Industrial & Commercial Bank of China announced it would continue to focus on exploring emerging markets in Asia, Latin America and Africa, where growth rates are high, according to the central bank-run Financial News.
"We have to study Chinese, we have to study Chinese," Chavez said.
Over the last few days, Chavez has touted several ongoing negotiations between Venezuela and China including a deal to build a new agricultural machinery factory in the South American nation.
Speaking during his weekly television show "Hello! President," Chavez said Venezuela will begin by importing machinery, since China is providing credit to purchase the goods, but added "I have asked them to build a machine factory here and they are willing."
Earlier this year, the Venezuelan government laid out ambitious housing and agricultural initiatives which included plans to construct 2 million new homes for the country's poor by 2017. On Tuesday, Chavez said Citic Group would play an integral role in meeting the lofty goal.
-By Ezequiel Minaya, Dow Jones Newswires; 58-414-120-5738;
[email protected]"
