China demands rights in Venezuela after U.S. firm takes over oilfields

A U.S.-backed oil company will assume control of Venezuelan oil fields previously operated by Chinese and Russian firms, in a move that reshapes the energy landscape in Latin America and deepens Washington's grip on one of the world's largest crude reserves.

Two U.S. officials told Reuters on Monday that North American Blue Energy Partners, a Barbados-based producer now controlled by Venezuelan businessman Alejandro Betancourt, will take over fields as part of a sweeping production agreement announced by President Donald Trump. Of the 14 contracts newly granted to NABEP, five had been operated by Chinese companies and one by a Russian firm.reuters

The Chinese operators displaced include China Concord Resources, which was sanctioned by the U.S. in 2019 for Iran-related activity, as well as Sinopec China Petroleum & Chemical Corporation and China National Petroleum Corp. Two other projects were linked to associates of ousted President Nicolás Maduro, and another to a relative of Maduro's wife, Cilia Flores.reuters

Washington Buys In

The deal goes beyond a standard concession transfer. The U.S. government will hold a 35% stake in NABEP and receive preferential access to 20% of the company's production at cost, with a right of first refusal on the remaining 80%. Washington will also hold veto power over NABEP's board, a majority of which must be American citizens.reuters

"Not only are we opening up new opportunities for the U.S. government to benefit and for U.S. operators to benefit, we are opening up the United States as the market for this oil which was previously being sent to China," a U.S. official told Reuters.reuters

NABEP is expected to control 17 projects in total, spanning some of Venezuela's most prolific regions including the Orinoco Belt and Lake Maracaibo, with proven reserves of roughly 65 billion barrels. The company aims to scale production from under 200,000 barrels per day to 1 million within five years.cryptobriefing+1

Beijing Pushes Back

China responded swiftly. Foreign ministry spokesman Guo Jiakun said on Tuesday that "China-Venezuela cooperation is protected by international law and the laws of both countries. China's legitimate rights and interests in Venezuela must be guaranteed".scmp

Guo added that "economic and trade cooperation between countries should follow the principles of equality, mutual benefit and win-win cooperation".scmp

A Geopolitical Pivot

The arrangement marks a reversal of years in which Chinese and Russian companies filled the vacuum left by Western oil majors retreating under sanctions. Beijing extended billions in oil-backed loans to Venezuela, while Russian firms maintained operational footholds even as U.S. pressure tightened.cryptobriefing

Whether NABEP can deliver on its production targets remains uncertain. Venezuela's oil industry lost much of its skilled workforce during years of economic crisis, and the infrastructure requires extensive rehabilitation. Major U.S. oil companies, wary of past expropriations and sanctions volatility, have stayed on the sidelines.cryptobriefing

The displaced Chinese and Russian firms are expected to weigh legal and arbitration challenges in the months ahead.newsquawk