China has agreed with Venezuela to support a fund that would finance US$6bn in extra-heavy and heavy crude oil E&P projects, Venezuela's President Hugo Chavez said in a report from state news agency ABN.

China will come up with US$4bn and Venezuela the balance, Chavez said.

Ma Kai, China's development and reform minister, has sent a letter to Venezuela's planning minister Jorge Giordani informing him of the Chinese government's approval of the fund.

Chavez first broached the issue of the fund during his fourth official visit to China a year ago. The two countries signed an MOU for the fund on March 27 this year.

An official with state oil company PDVSA told BNamericas days after the MOU signing the partnership could entail producing 800,000b/d in under five years in Venezuela's Orinoco extra-heavy oil belt.

Venezuela wants to diversify end markets for its crude and refinery products by increasing the number of shipments to China, India and other Asian and developing countries.

Visit BNamericas to access our real-time news reports, 10-year archive, Fact File company database, and latest research reports. Click here for a Free two week trial to our Latin America Oil & Gas information service.