Venezuela, China's Citic Group To Work On Oil, Mining Projects

Venezuelan President Hugo Chavez signed a series of accords with China's Citic Group Friday which included plans for both parties to work together on building offshore oilfield platforms and develop a gold mine formerly operated by a Canadian mining company.

The president signed the deals during a meeting with heads of Citic and other Venezuelan government officials broadcast on state television, just hours before Chavez left for Cuba where he is scheduled to undergo further surgery in relation to a tumor he had removed last year.

Delegations from Citic Group have visited Caracas frequently in recent years as both countries strengthen economic and political ties. Chinese state firms have made billions of dollars in loans to the South American country in exchange for shipments of more than 400,000 barrels of oil a day. The Asian nation operates projects in Venezuela in sectors ranging from agriculture to housing to oil.

As part of the latest agreements, Chavez said Citic will "participate" in Venezuela's Petropiar heavy oil upgrader facility, which is currently operated as a joint venture between state energy company Petroleos de Venezuela, or PdVSa, and Chevron Corp. (CVX). The president, however, didn't specify what the Asian company will do at the oil venture but said that he would be monitoring progress on the agreement from Cuba.

Elsewhere, Citic is also set to help Venezuela develop the Las Cristinas gold mine, Chavez said, adding that it could be "one of the largest reserves in the world."

The project was formerly operated by Canada's Crystallex International Corp. (CRYXF) until their contract was terminated by the Venezuelan government one year ago. The company, which recently filed for bankruptcy protection, is seeking billions in compensation from the Venezuelan government through an arbitration case pending in front of the World Bank's International Centre for the Settlement of Investment Disputes.

Chavez left for Havana Friday for surgery after announcing earlier this week that doctors had detected a possibly malignant lesion in his pelvic area, where a baseball-sized tumor was removed last year. The ailing 57-year-old socialist leader made the admission after months of declaring that he was cancer free. He has never publicly state what kind of cancer he suffered from and has received most of his medical treatment in secret in Cuba.

Though he has pledged to make a rapid recovery, the president's announcement has raised questions over his ability to campaign for the Oct. 7 presidential elections, where he is seeking a third six-year term.