Chavez is making a move. (generally whatever he does is bad news) This time he’s getting out of the IMF and World Bank while finishing his take over of the oil production facilities there in Venezuela.
Hard to say what all this will mean. He is trying to tie himself more closely to China. That could be interesting. Not at all sure why China would buy oil from Venezuela when it’s that much farther away than the middle east so the price will have to be higher. Plus Venezuelan oil is hard to get to, again increasing costs.
For Chavez however,
Some analysts believe that Chavez may have reserves in Orinoco that rival Saudi Arabia’s fields. If so, the Chinese have made a valuable partner, and not just strategically. They need a heavy and immediate infusion of oil in order to keep their economic growth, and the capital that the Chinese create with it will benefit Chavez. It could make him the most powerful man in the southern hemisphere and realize his dream of providing an opposite pole from the US in Latin America.
For the Chinese:
Chavez keeps promising new refineries at home and abroad, but they have yet to materialize. Now that he has chased the proven production capabilities of Western companies out of Venezuela, he may be hard pressed to even meet his current level of production. Chavez also faces another kind of problem in production costs; his oil is more expensive to pump and to refine than Saudi and African oil. If oil prices remain high, Chavez will have money to burn — but if they fall, he will lose his shirt to the Saudis.