U.S. Energy Secretary Chris Wright confirmed on Tuesday that China will not have claims to the revenue generated from new oil deals in Venezuela. This statement follows significant agreements that are set to more than double Venezuela's crude production in the coming years. Wright, who was in Caracas with U.S. Treasury and State Department officials, emphasized that these investments would substantially increase available oil production, thereby putting downward pressure on oil prices, though refining capacity remains a current challenge for gasoline and diesel prices.
These developments come days after U.S. President Donald Trump announced a separate deal granting the U.S. long-term access to a fifth of Venezuela's proven oil reserves, among the largest globally. Specifically, the private, U.S.-backed firm North American Blue Energy Partners (NABEP) will receive a 100-year lease for 17 oilfields in Venezuela, holding approximately 65 billion barrels of oil reserves. This arrangement gives the U.S. government holding rights to a 35% stake in NABEP and preferential access to 20% of its production at cost, with the Department of State having the right of first refusal for the remaining 80%.
NABEP is expected to gain operating control of 17 projects, 14 of which are new grants from the Venezuelan government. Notably, five of these 14 fields were previously operated by Chinese companies, including China Concord Resources (sanctioned by the U.S. in 2019 for Iran-related activities), Sinopec, and China National Petroleum Corp. One field was also previously operated by a Russian company. A U.S. official highlighted that this shift not only benefits the U.S. government and operators but also redirects Venezuelan oil, previously sent to China, to the U.S. market.
Despite potential Chinese discontent, a U.S. official downplayed concerns, asserting that China was likely anticipating these developments given the robust bilateral relationship between the U.S. and China. However, China's Foreign Ministry spokesperson, in a regular press conference, indicated that its cooperation with Venezuela is protected by international law and its interests in the country must be guaranteed. The U.S. also secured veto power over NABEP's board and directors, mandating that the majority of the board be American citizens.
Analysts have noted that while the deal may improve long-term supply and market sentiment, immediate relief in fuel prices is unlikely due to Venezuela's aging infrastructure and limited refining capacity in the U.S. Chevron, the largest American oil producer in Venezuela, along with Italy’s Eni, India’s ONGC, Colombia’s GeoPark, and the U.S.’ GE Vernova, are also set to sign new energy agreements this week, contributing to the projected doubling of Venezuelan crude production.
