The China National Petroleum Corporation is preparing to return to Venezuela after the Maduro government finalizes legislation seeking to attract more foreign capital to the industry.
According to a Bloomberg report citing unnamed sources familiar with the matter, CNPC is sending engineers and other staff to Venezuela and talking to local companies for maintenance operations at an oil-blending plant that the Chinese company operates together with PDVSA.
The Bloomberg sources also said CNPC was in talks with Venezuelan companies to ramp up oil production at five joint ventures that the company has with PDVSA. Indeed, CNPC had never entirely left Venezuela, but investments in its local operations declined significantly over the past few years amid constantly tightening U.S. sanctions.
Despite the sanction noose, Venezuela has been ramping up its oil exports, generating vital revenue. According to a recent Reuters report, the country, which is home to the world’s largest oil reserves, exported more than 700,000 bpd of crude in July—the highest daily export rate since February. Most of the oil went to China and Malaysia, although the latter is usually only a stop along Venezuelan oil’s trip to China.
The same report noted that three of the five crude oil blending facilities in the Orinoco Belt were operational, and another crude upgrader was preparing to restart operations after a year’s pause.
Yet, unlike CNPC, other companies are retreating from Venezuela. The latest to do this was Japanese Inpex, which sold its Venezuelan operations to a local firm, Sucre Energy Corp, according to another Reuters report. Before it, TotalEnergies and Equinor also left Venezuela, saying it was because of the high carbon intensity of their jointly operated venture, Petrocedeno.
It is because of this exodus that the Maduro government turned to legislation, aiming to lure in foreign oil investors—something that is apparently becoming increasingly difficult with the new emission considerations that have moved to the top of oil companies’ agendas. Sanctions remain a problem, but China has demonstrated more than once they are not a complete deterrent to its doing business with sanctioned countries.