Latin America gets a sweet taste of China’s oil diplomacy

Latin America is becoming a rich destination for China in its global quest for energy, with the Chinese quickly signing accords with Venezue...

Latin America is becoming a rich destination for China in its global quest for energy, with the Chinese quickly signing accords with Venezuela, investing in largely untapped markets like Peru and exploring possibilities in Bolivia and Colombia.

China’s sights are focused mostly on Venezuela, which ships more than 60 per cent of its crude oil to the United States. With the largest oil reserves outside West Asia, and a president who says his country needs to diversify its energy business beyond the United States, Venezuela has emerged as an obvious contender for Beijing’s attention.

The Venezuelan leader, Hugo Chavez, accompanied by a delegation of 125 officials and businessmen, and Vice President Zeng Qinghong of China signed 19 cooperation agreements in Caracas late in January. They included long-range plans for Chinese stakes in oil and gas fields, most of them now considered marginal but which could become valuable with big investments.

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Chavez has been engaged in a war of words with the Bush administration since the White House gave tacit support to a 2002 coup that briefly ousted him.

Still, Venezuela is a major source for American oil companies, one of four main providers of imported crude oil to the United States, inexorably linking the two countries’ interests.

‘‘The United States should not be concerned,’’ Rafael Ramírez, Venezuela’s energy minister, said in an interview, ‘‘because this expansion in no way means that we will be withdrawing from the North American market for political reasons.’’ In recent months, though, China’s voracious economy has brought it to Venezuela, and much of South America, in search of fuel.

‘‘The Chinese are entering without political expectations or demands,’’ said Roger Tissot, an analyst who evaluates political and economic risks in leading oil-producing countries for the PFC Energy Group in Washington.

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China’s entry is worrisome to some American energy officials, especially because the US is becoming more dependent on foreign oil at a time when foreign reserves remain tight.

Chinese interest in Venezuela, a senior committee aide said, underlines Washington’s lack of attention toward Latin America.

‘‘For years and years, the hemisphere has been a low priority for the US, and the Chinese are taking advantage of it,’’ the aide said, speaking on condition of anonymity. ‘‘They’re taking advantage of the fact that we don’t care as much as we should about Latin America.’’

To be sure, China, the world’s second-largest consumer of oil, has emerged as a leading competitor to the US in its search for oil, gas and minerals throughout the world — notably Central Asia, West Asia and Africa. —NYT