Private Chinese firm China Concord Resources Corp (CCRC) is developing two oilfields in Venezuela, from which it expects to produce 60,000 barrels per day (bpd) of crude by the end of next year, thanks to a planned investment of $1 billion, an executive involved in the project told Reuters on Friday.
Private Chinese operators are a rare sight in Venezuela, where Chinese state-held majors have developed oilfields in the past.
Yet, CCRC has signed a 20-year production sharing contract with Venezuela and is already producing 12,000 bpd from the two oilfields, Lago Cinco and Lagunillas Lago, the unnamed executive told Reuters.
The Chinese company’s plan entails pumping as much as 60,000 bpd from the two fields by the end of 2026 by reopening mothballed wells and developing new ones. The light crude from the fields would go to Venezuela’s state oil firm PDVSA, while the heavy crude is set to be shipped to China, according to the executive.
China’s state firms have stopped buying oil from Venezuela after the 2019 sanctions under President Trump’s first term in office. But independent Chinese refiners are key customers of Venezuela’s crude and have continued importing it through the years.
Large companies are also staying away from Venezuela, which has opened the door to private firms such as CCRC.
“Because of the U.S. sanctions on Venezuela’s oil sector, no big-name companies would dare operate there, handing opportunities to small companies like Concord,” the executive told Reuters.
U.S. supermajor Chevron is a rare Venezuelan presence among the biggest international oil firms, now that its license to operate in the country holding the world’s biggest crude reserves has been reinstated.
At the end of July, the Trump Administration granted Chevron a sanction exemption for its operations in Venezuela but only on the condition that no money from these operations would go to the Venezuelan government.
Last week, Chevron dispatched the first two Venezuelan crude cargoes to the U.S. since Washington restored its license. The Mediterranean Voyager and Canopus Voyager left Venezuelan waters at the end of last week loaded with Hamaca and Boscan heavy crudes, bound for the U.S. West Coast and Port Arthur, Texas, respectively.
By Tsvetana Paraskova for Oilprice.com
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