The United States has effectively taken control of Venezuela's oil fields, complicating China's ability to recover its loans.
The Donald Trump administration has signed a major oil agreement with Delcy Rodriguez, the Venezuelan government official, which was approved by the Venezuelan parliament on September 1. Under the agreement, North American Blue Energy Partners (NABEP), Venezuela's second-largest private oil company, will receive a 100-year lease on 17 oil fields. These fields contain an estimated 65 billion barrels of oil, surpassing the total proven reserves of the United States, which stands at 46 billion barrels. The U.S. government, through the Department of Defense's Strategic Capital Office, will acquire a 35% stake in NABEP and will receive 20% of the extracted oil at production cost for supply to its refineries.
Some of the 17 oil fields were previously managed by China. Since 2000, China has reportedly provided over $100 billion in loans to Venezuela, all secured by oil. The loans are repaid through oil deliveries, and it is estimated that China holds more than $10 billion in outstanding loans.
According to the U.S. Energy Information Administration (EIA), Venezuela has proven reserves of 303 billion barrels, making it the world's largest oil producer, accounting for 17% of global reserves. S&P Global reported that in August, about half of Venezuela's daily oil exports of 1.1 million barrels were sent to the United States, with the remainder going to India and the Caribbean. In contrast, China, once the largest buyer of Venezuelan oil, has not imported any in recent months.
On September 3, Hong Kong's South China Morning Post reported that Chui Shoujun, a professor at Renmin University of China, stated, "The U.S. has effectively taken control of Venezuela's oil, making it unlikely for China to recover its loans." He noted that PetroChina, a state-owned energy company that had established joint ventures in Venezuela to produce oil for loan repayment, is expected to incur the most significant losses.
Dylan Lo, an associate professor at Nanyang Technological University in Singapore, explained that this agreement will result in substantial losses for China. He noted that while China has previously purchased Venezuelan oil at discounted prices, it will now have to negotiate prices in the international market. Additionally, independent Chinese refineries, known as 'teapots,' which have been buying Venezuelan oil under U.S. sanctions, are expected to face margin pressures going forward.
Meanwhile, Chinese Foreign Ministry spokesperson Guo Jikun stated during a regular briefing on September 1 that "cooperation between China and Venezuela is protected by international law and the laws of both countries," emphasizing that China's legitimate rights and interests in Venezuela must be safeguarded.
* This article has been translated by AI.
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