Chinese and Russians agree to invest in Venezuelan oil

China pledged to invest US$16 billion in Venezuela's eastern Orinoco oil belt, where it will operate alongside state-run Petroleos de Venezuela SA, or PDVSA, he said. PDVSA and China's National Petroleum Corp. have been working to reach an agreement since signing a statement of intent last year.

On Saturday, PDVSA announced that a consortium of five mostly Russian companies had also agreed to invest in the heavy oil-producing region, and Chavez said that investment would total US$20 billion.

Two years ago, Chavez nationalized four major oil projects in the Orinoco region, and private and state-run investors have been slow to bid on new contracts that would increase production in the region's Carabobo field.

Nineteen companies paid US$2 million each for technical information about the deposits, but PDVSA has repeatedly pushed back bidding as it deals with questions from the companies.

Patrick Esteruelas, an analyst with the Eurasia Group in New York, expressed doubts that the same Russian and Chinese companies that have dragged their feet in the bidding process would pledge to invest billions in other fields of the Orinoco region.

“I think skepticism is the natural reaction,” Esteruelas said.

Venezuela expects to pump an additional 900,000 barrels of crude per day under the contracts with Russian and Chinese interests, and will market the oil together with its new partners, Chavez said.

The world's 11th-largest oil producer, Venezuela relies its vast reserves for 93 percent of exports and nearly half the government's budget. But world oil prices have fallen 50 percent from last year's peak, to trade at US$72.51 a barrel on the New York Mercantile Exchange on Wednesday.

Chavez said he expects world crude prices to stabilize between US$80 and US$100 a barrel.

“cannot and will not” pull back from stimulus measures.

The government may need to consider tightening monetary policy if economic growth is more than 9 percent, inflation tops 3 percent or exports gain by more than 15 percent, Chen said.

Labor shortages in Chinese export hubs are among signs that the economy is recovering, Yin Weimin, the Minister of Human Resources and Social Security, said Sept. 9, citing difficulties hiring workers in the Yangtze and Pearl River deltas,

China's gross domestic product grew 7.9 percent in the second quarter, up from 6.1 percent in the three months through March. GDP growth slowed to 9 percent for 2008 from 13 percent in 2007.

The nation's 4 trillion yuan (US$586 billion) stimulus plan, announced in November last year, runs through 2010.

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