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August 21, 2008

Venezuela, Vietnam set up joint oil refining JVs

Venezuela and Vietnam have agreed to create two joint oil refining companies, AFP quoted Venezuela Energy and Oil Minister Rafael Ramirez as saying Wednesday.

"PDVSA (Petroleos de Venezuela) and Petrovietnam will work together to build the two joint companies -- one to transport oil to Vietnam and the other to refine that oil in Vietnam, at a refinery we jointly own," Ramirez, who also heads state-run PDVSA, said after a meeting with Vietnamese officials.

Vietnam and Venezuela are expected to announce on September 15 a new oil exploration agreement in the oil-rich Orinoco basin in eastern Venezuela, where Petrovietnam already has a concession.

As Latin America's top oil producer and fifth largest oil exporter to the United States, Venezuela a year ago established a joint-ownership system of its oil reserves giving PDVSA a minimum 60 percent control of any foreign venture in the field.

Venezuela says it produces some 3.3 million barrels of oil per day (bpd), 2.7 million of which are for export. The International Energy Agency, however, puts Venezuela's oil production at less than 2.5 million bpd.

Venezuela and Vietnam also plan to build a production facility to make energy-saving lightbulbs in Venezuela, Ramirez said.

"It will meet not only our needs but also those of ALBA members and countries in South America that cooperate with us, including Cuba," he added, referring to the alternative free trade market that Venezuela's leftist President Hugo Chavez is spearheading. ALBA includes Venezuela and fellow leftist regimes in Cuba and Bolivia.

Vietnamese Minister of Industry and Commerce, Vu Huy Hoang, welcomed his government's cooperation with Venezuela, saying it offers "many advantages and great challenges to worldwide trade barriers."

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