China Concord Resources Corp (CCRC) is developing two oilfields in Venezuela with investment plans exceeding $1 billion and ramping up crude production to 60,000 barrels per day (bpd) by the end of 2026, an executive directly involved said to Reuters.
The investment is one of the few made by a private Chinese company in the OPEC nation, where the government of President Nicolas Maduro has been hobbled by international sanctions that prevent foreign capital from flowing in to help rebuild its crumbling oil sector.
The investment and production goals are being reported for the first time.
Beijing’s energy ties with Caracas
China has long been a significant ally of Maduro and his predecessor, Hugo Chavez, and today purchases more than 90% of Venezuela’s oil exports.
Before the United States implemented energy sanctions in 2019, the Chinese state oil corporation CNPC was one of Venezuela’s top international investors and a major lender.
According to the CEO, CCRC initiated talks in early 2023 about its participation in the Lago Cinco and Lagunillas Lago oilfields and inked a 20-year production sharing arrangement in May 2024.
The contract model, developed under Venezuela’s 2020 Anti-Blockade Law, permits foreign investors to operate fields in exchange for a portion of the production.
Reopening Lake Maracaibo fields
The oilfields in Lake Maracaibo, Venezuela’s second-largest producing area, are among a cluster of blocks for which PDVSA has in the past sought partners.
According to Reuters, PDVSA documents cited by the news agency say most potential partners have little or no experience producing oil.
The executive said that 60 Chinese experts and a drill rig were sent to Venezuela by CCRC, which has no experience in oil drilling, in September 2024 to reopen some 100 wells.
After years of decline associated with a lack of investment and technical expertise, production has increased to approximately 12,000 bpd.
The company also intends to drill 500 wells there and increase production to 60,000 bpd by the end of 2026. PDVSA will take the light crude from the fields, while the heavier crude will go to China.
Opportunities for smaller players
“Because of the US sanctions on Venezuela’s oil sector, no big-name companies would dare operate there, handing opportunities to small companies like Concord,” according to the CEO.
PDVSA has stabilised national oil output at roughly 1 million bpd, aided in part by US permits that allow some foreign partners to operate and export.
Since sanctions were imposed in 2019, Chinese state oil companies have generally stopped buying Venezuelan petroleum directly, though independent refiners continue to do so through traders.
Venezuela is currently heading to a fresh cycle of hyperinflation and escalating tensions with the United States, as President Donald Trump intensifies efforts to combat Latin American drug cartels by increasing surveillance near Venezuelan seas.
The circumstance makes it more difficult for Venezuela to raise funds in most international markets.
Despite the rising tensions, in late July, the US Treasury Department gave Chevron a new license to operate in the sanctioned South American country and export its crude, reversing the tougher regulations imposed earlier this year by the Trump administration.
The first two shipments of Venezuelan oil exported by Chevron Corp (CVX.N) since getting a renewed US license last month have left for the United States, according to vessel monitoring data released on August 15.
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