Venezuela Sells Oil Stake to China’s Citic

PDVSA has agreed to sell a 10% stake in the Petropiar heavy oil upgrading project to Citic Group, China’s state-controlled investment company. The Venezuelan state-owned oil company does not disclose the value. The deal gives Citic an entry into one of four heavy crude upgrading ventures located along the oil-rich Orinoco river basin. Currently, Petropiar, formerly known as Ameriven, is 70% owned by PDVSA, with the US’s Chevron holding the remaining 30%. Officials at PDVSA and Citic could not immediately be reached for additional details about the agreement. During the summer of 2007, Venezuela nationalized the 40% stake that US major ConocoPhillips held in the venture, a move which resulted in PDVSA’s current 70% share. Under the deal signed with Citic, the Venezuelan company will offer the 10% stake from its own participation in the venture, leaving PDVSA with 60%, Citic with 10% and Chevron with its current 30% stake. Allowing the Chinese into the country’s most prized oil ventures comes as the country has become increasingly reliant on financing from China over the past few years. The deal comes after Venezuela signed a $10bn financing agreement with the Chinese government to support oil projects.