Venezuela has swiftly replaced departing Western oil firms with Chinese companies to maintain oil production operations after U.S. sanctions forced firms like Chevron to exit the country.
The move follows the expiration of U.S. licenses on May 27 that had previously allowed American companies to operate in Venezuela. The licenses were originally granted under former President Joe Biden but were revoked in February by President Donald Trump as part of a return to the “maximum pressure” campaign against Caracas—an approach Trump had implemented during his first term.
According to a report by Bloomberg, Venezuela’s state-owned oil company Petróleos de Venezuela, S.A. (PDVSA) has signed at least nine new agreements to continue production, including deals with at least two Chinese firms.
The companies include Argentina’s Aldyl Argentina SA and the Chinese firms Anhui Guangda Mining Investing Co. and China Concord Resources
According to the Bloomberg report, the firms that signed the new deals will be exempt from certain taxes and will receive up to a 50% share of any crude oil produced in the allocated blocks. PDVSA will also cover its portion of the investment costs by paying in crude oil.
Despite Washington’s renewed sanctions, Venezuela—home to approximately 17% of the world’s proven oil reserves—has pledged to continue oil production and exports. “PDVSA has a plan to keep producing oil despite the U.S.’s unilateral coercive measures,” Oil Minister Delcy Rodríguez said last week.
In May, Venezuela's oil exports not only remained stable but actually increased by around 10% compared to April, even after Chevron's production license expired. The growth came largely thanks to increased purchases from China, which has stepped in as a key partner amid the exodus of Western firms.
In February, Trump warned that any country continuing to buy Venezuelan oil would face a 25% tariff on all goods exported to the U.S., though no formal policy or enforcement action has yet followed.