Chavez heads to China with more oil in his pockets

Aug 21, 2006, 18:11 GMT

Caracas - Venezuelan President Hugo Chavez heads to Beijing Monday on his fourth visit to China, where he is expected to sign a deal to massively increase Venezuela's oil deliveries to the booming Chinese economy.

The trip is part of Chavez' push to disengage economic dependency on the United States, which has seen him form closer ties with Iran, the Middle East in general and an increasingly oil-hungry Asia.

The journey has great 'strategic importance,' Chavez said in broadcast remarks.

Venezuela is the world's fifth largest crude oil exporter, and ranks fourth in production in the Organization of Petroleum Exporting Countries (OPEC), behind Saudi Arabia, Iran and the United Arab Emirates.

The US currently imports 11 per cent of its oil from Venezuela, a leverage that Chavez, the left wing nationalist leader, is anxious to exploit as he leads efforts within Latin America for more economic independence from the US.

Vitriolic verbal exchanges pass regularly between Caracas and Washington.

Just last month, Venezuela's state-owned oil company narrowed the flow of petroleum to the US, which gets 11 per cent of its supplies from Venezuela, and shut down petrol distribution in the US through its wholly owned Citgo stations.

In China, Chavez is to sign contracts for China to build 18 tankers to haul more crude oil to Asia, and 12 drilling rigs to help Venezuela boost its oil production figures. The nation has failed to meet its OPEC target for supplies since September 2002.

By year's end, China is to double its import of crude oil from Venezuela, from the current 70,000 to 100,000 barrels a day to 200,000 barrels of crude oil a day. That figure was only 14,000 in 2004, according to Bloomberg financial news service.

Chavez, who faces presidential elections in December, is to meet with Chinese President Hu Jintao and Prime Minister Wen Jiabao in China.

Afterwards, Chavez is to travel to Malaysia and Angola, Venezuelan officials said. Just recently, Chavez returned triumphant from a huge weapons shopping trip to Russia, and also visited Belarus, Qatar, Iran, Vietnam, Mali and Benin.

Iran, currently engaged in a wrestling match with the international community over its nuclear enrichment programme, has offered to help Venezuela develop its nuclear capacity. During a recent visit to Iran, Chavez quipped that US President George W Bush has a 'relationship with the devil.'