The deal is set to be renewed after three years.
Venezuela also announced its intention to supply 1 million barrels of crude a day (bpd) to China by 2011, up from the current government figures of 350,000 bpd, and to construct three refineries in China.
As relations between Caracas and Washington soured further last year, US officials are understood to have voiced their reservations about the agreement – before it was signed – to Chinese authorities.
Venezuela is currently one of the United States's top five oil suppliers. But if Mr. Chávez can diversify Venezuelan crude exports with new markets, some observers suggest that that might encourage him to take an ever harder line against his longtime foe and its corporations.
Last summer, Chávez demanded that six foreign oil companies cede majority ownership to Petroleos de Venezuela, PDVSA, the state oil company.
"He is hoping to get [from China] the kind of financial support and expertise [he loses] when he chases out Conoco," says William Ratliff, an expert on China's influence in Latin America at Stanford University's Hoover Institution. "Certainly Venezuela has in mind that relations with China – and Russia and Iran – make it less dependent on major international companies."