Venezuela has increased its oil export to China to one million barrels per day according to a statement on Tuesday (September 18). The state owned Venezuelan company has sold 49 per cent of its shares to China National Petroleum Corporation (CNPC) which will partly own after the sale.
Still, it remains unclear as to how much do Venezuela receive or which company bought the shares in Sinovensa. Maduro said the Sinovensa sale formed part of a plan to invest $5 billion over the next year in Chinese projects to double oil production and be able to send a million barrels per day to China. Venezuela’s oil production is at 60 year low after of little investment and crumbling infrastructure.
Venezuela President says that new investment from China will boost the economy in Venezuela which has been in a downfall for decades. This will uplift the financial system, rising oil prices, boost oil production. China is a major economic partner which has agreed to invest $5 billion more in Venezuela, said Maduro following his trip to Beijing. Last week Maduro visited China to have bilateral talks with Chinese Premier Xi Jinping from saving his grappling economy.
“We are taking the first steps into a new economic era,” he said. “We are on track to have a new economy, and the agreements with China will strengthen it.” Commenting on the deal he said Venezuela will increase production and the daily export of oil to China to 1 million barrels a day.
However, China is taking a strong role in its new agreements. Over the last decade China has given Venezuela $65 billion in loans, cash and investment. Venezuela owes more than $20 billion. The head of the National Petroleum Corporation of China will soon travel to Venezuela to finalize plans on increasing oil exports.
“The Chinese are reluctant to throw good money after bad,” Dallen said. “They do want to get paid back. The only way they can get paid back is to get Venezuela’s production back up.”
Once Venezuela was one of the richest oil producing state, after the gripped economy the Venezuelan citizens struggle to buy basic amenities like food, medicine. It faced historic crisis greater than the US depression and still continues to battle with the starving economy.