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Last Updated: Tuesday, 22 August 2006, 20:26 GMT 21:26 UK
Energy focus for Chavez in China
Venezuelan President Hugo Chavez arriving in Beijing
Venezuela sees China as a key ally
Discussions over energy co-operation are set to dominate Venezuelan President Hugo Chavez's visit to China, which began on Tuesday.

Oil producer Venezuela wants to reduce its reliance on the US, the destination for most of its oil exports despite the two countries' ideological differences.

China, in need of oil supplies to maintain its rapid economic growth, offers a lucrative alternative market.

Mr Chavez will meet counterpart Hu Jintao during the six-day trip.

Oil increase

The two leaders are expected to agree to increase the amount of oil Beijing buys from Venezuela as well as approving the sale of Chinese oil tankers to Caracas.

The visit - Mr Chavez's fourth to China since he came to power in 1998 - is also politically significant, since China regards Venezuela as a valuable counterweight to US influence in Latin America.

It (Venezuela) would obviously prefer to have a substantial component of that new oil go to China rather than the US
Mark Daniell,
Energy analyst

China is taking an increased interest in the region, having recently agreed a free trade deal with Chile.

The two countries already co-operate in energy matters, with Chinese state oil firm CNPC enjoying oil exploration contracts in Venezuela.

Venezuala has offered to increase oil exports to China to up to one million barrels a day by 2012, if it can raise its own production levels.

Beijing is keen to buy more Venezuelan oil even though its high sulphur content means that it is more costly to refine.

'Strategic alliance'

China is the world's second largest energy consumer and Beijing has been looking further afield to secure future oil supplies, building relations with major producers in Africa.

Ahead of Mr Chavez's visit, Venezuela's ambassador to China said it would consolidate the two countries' "strategic alliance".

One energy analyst said the burgeoning relationship between the two countries was mutually beneficial.

"If everything goes to Venezuela's plan, it will have more oil to dispose of," said Mark Daniell, from consultancy firm Cuscaden Group.

"It would obviously prefer to have a substantial component of that new oil go to China rather than the US."




SEE ALSO
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