PDVSA: Orimulsion project with China still on track

- Monday, June 6, 2005

PDVSA: Orimulsion project with China still on track

Although construction has yet to start, the development of a 7.25 million-tonne/year orimulsion production facility that would supply the Chinese market is on course, Venezuela's state oil firm PDVSA said in a statement over the weekend.

PDVSA subsidiary Bitor signed a joint venture agreement in 2001 with the China National Petroleum company CNPC and its subsidiary Petrochina Fuel for the construction of a plant to produce orimulsion, a patented boiler fuel made from Venezuela's heavy crude deposits. The parties would build the plant through the Orifuel Sinoven (Sinovensa) JV.

PDVSA dismissed media reports that CNPC would be able to use the orimulsion patent without paying a royalty for it and that PDVSA had ceded its Orimsulsion client list to the Chinese company without additional compensation.

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"It is false that all the rights over the brands and patents of orimulsion without any reserve of limitation whatsoever" had been ceded to the Chinese partners, PDVSA stated.

"It is also false that PDVSA has ceded its client list and supply contracts to Sinovensa. PDVSA keeps on honoring its commitments in the matter of orimulsion, conforming to existing contracts."

PDVSA president and energy and oil minister Rafael Ramírez has said that once PDVSA's existing contracts expire, the company will leave the orimulsion business, except for its share in the Sinovensa joint venture.

PDVSA said that "its business policy is oriented... to the best valuation of our main natural resource: oil."