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Posted: 8/24/2006 4:41:01 AM EST
Chavez unveils China oil plan

Thursday, August 24, 2006; Posted: 3:38 a.m. EDT (07:38 GMT)


BEIJING, China (AP) -- Venezuela's President Hugo Chavez has said his country plans to export 500,000 barrels of oil a day to China within five years, as he prepared for a meeting Thursday with the Chinese president during a tour to boost energy ties.

Chavez arrived in the Chinese capital on Wednesday with plans to sign agreements to boost China's investment in oil-rich Venezuela with joint projects in petroleum, telecommunications, farming and railways.

He also proposed an ambitious target plan under which Venezuela -- the world's No. 5 oil exporter -- will almost quadruple its sales to China, which wants access to Latin American energy supplies to fuel its booming economy.

"Within five years we'll arrive at half a million barrels (a day) to China. We are currently exporting close to 150,000 barrels (a day), and next year we will double that," Chavez said.

"The oil issue is of utmost importance because we are diversifying the petroleum business. We are moving toward a new petroleum model," said Chavez, speaking on Venezuelan state television from China. "It's one step more in a strategic alliance."

He was scheduled to meet with President Hu Jintao on Thursday and with China's No. 2 leader, Wu Bangguo, and Premier Wen Jiabao on Friday, the Chinese Foreign Ministry said.

Chavez will also talk with Chinese executives this week about developing his country's coal and gold resources, Dow Jones Newswires said Wednesday.

The Venezuelan leader plans to visit the eastern city of Jinan to meet with coal and gold mining companies, Dow Jones said, citing an unidentified official accompanying him.

Saul Ameliach, president of the state-run Pequiven petrochemical firm, said officials from both countries would also sign an agreement for Chinese help in building a petrochemical plant within the massive Amuay oil refinery located in western Venezuela.

"China is very advanced in the petrochemical refining area," Ameliach said in a statement.

Chavez is likely to meet with executives from Shandong Gold Group and Yankuang Group Corp., two companies in a joint venture to develop a gold mine in Venezuela, Dow Jones said.

The left-leaning Chavez has strengthened ties with Beijing since taking office in 1999. He said last week that he will buy Chinese-made oil tankers and seal an oil exploration deal.

The United States is the No. 1 buyer of Venezuelan crude, but Chavez's government has sought to sell more to other countries.

Chavez said his government would create joint ventures with two Chinese state-owned oil companies to produce and export crude from Venezuela's petroleum-rich Orinoco River basin as part of a larger energy cooperation plan.

He said agreements would be signed Thursday with China National Petroleum Corp. and China Petroleum and Chemical Corp.

Chavez said Venezuela's growing relations with China are part of his government's efforts to create a "multipolar" world to counter U.S. hegemony. He accuses Washington of using its might to bully countries like Venezuela from developing military technology.

Copyright 2006 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.


http://www.cnn.com/2006/BUSINESS/08/24/china.venezuela.ap/index.html
Link Posted: 8/24/2006 4:46:45 AM EST
[#1]
Apparently Chavez flunked econ 101.

Why would China pay the extra freight to ship oil from further away than where they currently get it, and buy heavier, more sour crude to boot?
Link Posted: 8/24/2006 4:49:00 AM EST
[#2]
Fuck it.  Lets invade, shoot that fucker and start ARFCOM Fuels.  
Link Posted: 8/24/2006 4:50:07 AM EST
[#3]

Quoted:
Apparently Chavez flunked econ 101.

Why would China pay the extra freight to ship oil from further away than where they currently get it, and buy heavier, more sour crude to boot?


Dunno…

Maybe he wants to stop selling to the US and China is an alternate market with a huge need for oil that allows him to do this for ideological reasons?

ANdy
Link Posted: 8/24/2006 4:56:01 AM EST
[#4]

Quoted:

Quoted:
Apparently Chavez flunked econ 101.

Why would China pay the extra freight to ship oil from further away than where they currently get it, and buy heavier, more sour crude to boot?


Dunno…

Maybe he wants to stop selling to the US and China is an alternate market with a huge need for oil that allows him to do this for ideological reasons?

ANdy


Chavez has made no secret of his desire to sell less to the US. However, China is not stupid. They are not going to pay more for for something they can get cheaper elsewhere.
Link Posted: 8/24/2006 4:56:24 AM EST
[#5]

Quoted:
Apparently Chavez flunked econ 101.

Why would China pay the extra freight to ship oil from further away than where they currently get it, and buy heavier, more sour crude to boot?


With the trade surplus the way it is they already can buy up all of our scrap metal and send it to China nearly for free.  Most of the boats going back to China are empty.  A short trip south to pick up oil would not be a big deal for them.  It is better than an empty ship coming back to China.

The quality of the oil I would think is the bigger issue. I have read nothing but negative reports on the oil quality from chavez's littk paradise.
It has to be much more expensive to make good gasoline out of that sludge.

Link Posted: 8/24/2006 5:01:06 AM EST
[#6]

Quoted:

Quoted:
Apparently Chavez flunked econ 101.

Why would China pay the extra freight to ship oil from further away than where they currently get it, and buy heavier, more sour crude to boot?


With the trade surplus the way it is they already can buy up all of our scrap metal and send it to China nearly for free.  Most of the boats going back to China are empty.  A short trip south to pick up oil would not be a big deal for them.  It is better than an empty ship coming back to China.

The quality of the oil I would think is the bigger issue. I have read nothing but negative reports on the oil quality from chavez's littk paradise.
It has to be much more expensive to make good gasoline out of that sludge.



I believe scrap steel and oil are shipped in very different vessels.
Link Posted: 8/24/2006 5:09:17 AM EST
[#7]
Communist suck at Econ ( part of the reason they are communists in the first place), that is why eventually the house of cards will fall.
Link Posted: 8/24/2006 5:21:02 AM EST
[#8]
I wish our country didn't have to worry about chavez and oil dependence.
Link Posted: 8/24/2006 5:22:50 AM EST
[#9]

Quoted:

Quoted:

Quoted:
Apparently Chavez flunked econ 101.

Why would China pay the extra freight to ship oil from further away than where they currently get it, and buy heavier, more sour crude to boot?


With the trade surplus the way it is they already can buy up all of our scrap metal and send it to China nearly for free.  Most of the boats going back to China are empty.  A short trip south to pick up oil would not be a big deal for them.  It is better than an empty ship coming back to China.

The quality of the oil I would think is the bigger issue. I have read nothing but negative reports on the oil quality from chavez's littk paradise.
It has to be much more expensive to make good gasoline out of that sludge.



I believe scrap steel and oil are shipped in very different vessels.



You can get bulkers that can carry either cargo … OBO's , Ore-Bulk-Oil Carriers

Andy
Link Posted: 8/24/2006 5:26:28 AM EST
[#10]

Quoted:

Quoted:

Quoted:

Quoted:
Apparently Chavez flunked econ 101.

Why would China pay the extra freight to ship oil from further away than where they currently get it, and buy heavier, more sour crude to boot?


With the trade surplus the way it is they already can buy up all of our scrap metal and send it to China nearly for free.  Most of the boats going back to China are empty.  A short trip south to pick up oil would not be a big deal for them.  It is better than an empty ship coming back to China.

The quality of the oil I would think is the bigger issue. I have read nothing but negative reports on the oil quality from chavez's littk paradise.
It has to be much more expensive to make good gasoline out of that sludge.



I believe scrap steel and oil are shipped in very different vessels.



You can get bulkers that can carry either cargo … OBO's , Ore-Bulk-Oil Carriers

Andy


Precious few bulk carriers come from China to the US. Most vessels involved in US-China trade are container ships. And even if you have OBO's, the added expense of shipping the oil from Venezuela versus their current suppliers still makes it cost prohibitive.

Oil is a fungible commodity. You simply don't buy it from further away if you can get it from closer. Chavez, as usual, does not understand how economics works.
Link Posted: 8/24/2006 5:46:04 AM EST
[#11]

Quoted:

Quoted:
Quoted:
Quoted:
Quoted:


Precious few bulk carriers come from China to the US. Most vessels involved in US-China trade are container ships. And even if you have OBO's, the added expense of shipping the oil from Venezuela versus their current suppliers still makes it cost prohibitive.

Oil is a fungible commodity. You simply don't buy it from further away if you can get it from closer. Chavez, as usual, does not understand how economics works.


If you can't get it closer, you buy it further way. Japan buys nearly all it's Oil from the ME, even though SE Asia is far closer. China has a demand for oil that is growing at a phenomenal rate, to fill that need they will need to buy from anywhere they can, and their shipping costs are far lower than ours. The ships are state owned and the crews paid a pittance with almost no money spent on the piss poor maintenance of the ships.

ANdy
Link Posted: 8/24/2006 5:51:42 AM EST
[#12]
I think it's great.  Firstly, as others have pointed out the economics of it will be to the detriment of China and possibly Venezuela.  Secondly, if we do have to go to war with China at some point in the future, we won't have to send ships or submarines very far to stop that particular supply of oil.  If we have an administration with some brain, they will use simple strangulation instead of boots on the ground and dead Americans.
Link Posted: 8/24/2006 6:26:28 AM EST
[#13]

Quoted:
Quoted:
Apparently Chavez flunked econ 101.



The quality of the oil I would think is the bigger issue. I have read nothing but negative reports on the oil quality from chavez's littk paradise.
It has to be much more expensive to make good gasoline out of that sludge.




Pump gas in not the only thing made from Crude.

Im in the asphalt industry and unfortunatly Venezuela's heavy crude is some of the best in the world for refining ino AC "the back gooey tar that goes into asphalt"

Let me tell ya, its a great feeling knowing that a 3rd world dictator who hates you and your country is in charge of the price of the key ingredient for the product that is your livelyhood.
Link Posted: 8/24/2006 6:32:34 AM EST
[#14]

Quoted:

Quoted:
Quoted:
Apparently Chavez flunked econ 101.



The quality of the oil I would think is the bigger issue. I have read nothing but negative reports on the oil quality from chavez's littk paradise.
It has to be much more expensive to make good gasoline out of that sludge.




Pump gas in not the only thing made from Crude.

Im in the asphalt industry and unfortunatly Venezuela's heavy crude is some of the best in the world for refining ino AC "the back gooey tar that goes into asphalt"

Let me tell ya, its a great feeling knowing that a 3rd world dictator who hates you and your country is in charge of the price of the key ingredient for the product that is your livelyhood.



<China Mode ON>… all your blacktop is belong us!…<China Mode OFF>


Link Posted: 8/24/2006 8:54:20 AM EST
[#15]

Quoted:

Let me tell ya, its a great feeling knowing that all the 3rd world dictators hate you & your country and that they are in control of the price of the product that your economy is based upon.
Link Posted: 8/24/2006 9:04:16 AM EST
[#16]
No problem, we'll just close the Panama Canal to them and, oh wait, we can't.  Carter gave it to the fucking Panamanians for no good reason
Link Posted: 8/24/2006 12:13:22 PM EST
[#17]

Quoted:
No problem, we'll just close the Panama Canal to them and, oh wait, we can't.  Carter gave it to the fucking Panamanians for no good reason


Wasn't the smartest of moves to give an UTTERLY vital US communications link to a 3rd party, was it…

ANdy
Link Posted: 8/25/2006 4:42:51 AM EST
[#18]

Quoted:
No problem, we'll just close the Panama Canal to them and, oh wait, we can't.  Carter gave it to the fucking Panamanians for no good reason


MAybe there wasn't "good reason" for us, but I'm sure the reason was "good" to him.
Link Posted: 8/25/2006 4:58:39 AM EST
[#19]
FYI- If you fill up at a Citgo, you're supporting Chavez's communist government.  Citgo is owned by Venezuela and/or Chavez.
Link Posted: 8/25/2006 5:09:23 AM EST
[#20]

Quoted:
Fuck it.  Lets invade, shoot that fucker and start ARFCOM Fuels.  


China will have a strategic presence in Central America.   They'll eventually shoot that #*& and start China Star fuels Central America.
Link Posted: 8/25/2006 5:28:42 AM EST
[#21]
This is NOT bad economics. Anyone here watch the movie oil storm? China needs Mucho gasolino, so they get it whereever they can. As to price, most gasoline in China is expensive, so whatever price Chavez is asking cant be all that bad. Most people use bicycles and PT. It's used for industrial purposes. WE got gas all the way from Saudi aRabia in the 90's and it only cost us $1.30 a gallon. THink of how cheaply China ships all thier crap to us? Hong Kong is known for its merchantile fleet.

As to Chavez.....Well guess what, but we backed the wrong horse and now we are paying for it, simple as that. Anyone hear of Chavez prior to 99?? He had been president before that. So why is he pissed? Look Im not gonna say it was "the CIA"
Or anything, you know what im saying? But When Chavez was first in power there was a "coup d- etat" against him. Immediatly Bush backed the plotters and said that Chavez should admit defeat. It seemed like Washinton was fucking with Latin politics again. (hey, I'm not saying he was). Anyhow, Those people are really sick of that Banana republic revolution bullshit, So they took to the streets to demand that Chavez (who was popularly elected) be given back power. Washington got a blackeye, and Chavezes popularity soared. Well basically he's been pissed at us ever since.
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