China asserts rights in Venezuelan oil industry must be protected
Beijing (ANTARA) - The Chinese government has asserted that its rights alongside Venezuelan oil companies must be maintained following the United States’ release of details regarding an energy management agreement in the Latin American nation.
“We are aware of the agreement. I want to emphasise 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 protected,” stated Chinese Foreign Ministry Spokesperson Guo Jiakun during a press conference in Beijing on Tuesday (1/9).
The US government released details of its oil agreement with Venezuela on Monday (31/8) via a fact sheet on the official White House website, following an announcement by President Donald Trump.
Under the agreement, Venezuela’s interim authorities have granted a 100-year concession to North American Blue Energy Partners (NABEP), a private company and the second-largest private oil producer in Venezuela, to manage 17 oil fields with proven reserves estimated at approximately 65 billion barrels. In exchange, NABEP will grant a 35 per cent stake to the Office of Strategic Capital (OSC), which falls under the US Department of War, in its parent company.
“China always advocates that relations between countries be handled in accordance with the purposes and principles of the UN Charter, and that economic and trade cooperation between nations must follow the principles of equality, mutual benefit, and win-win cooperation,” Guo Jiakun asserted.
The fact sheet noted that NABEP also grants the US Department of State the right to purchase 20 per cent of the output from all current and future fields it operates at a price equivalent to production costs, as well as a right of first refusal on the remaining 80 per cent.
The US government holds veto power over the appointment of any members to the NABEP board of directors, while the majority of the board must be US citizens. The agreement between the US government and NABEP is subject to US law and falls under the jurisdiction of US courts.
The fact sheet further stated that millions of barrels of new Venezuelan oil output will be processed through US refineries and transported using US-owned drilling rigs and infrastructure. The US government stated that the deal will not place any burden on American taxpayers.
Trump is scheduled to meet with the boards of directors of both large and small oil refineries on Tuesday (1/9), according to several reports on Monday.
Brent crude prices surged by approximately 28 per cent amidst US military operations against Iran.
Venezuelan oil accounts for about 4 per cent of China’s total oil imports, which primarily originate from the Middle East and Russia. Venezuela itself possesses the world’s largest proven oil reserves, estimated at 303 billion barrels, representing approximately 17 per cent of global proven reserves.
According to the American Enterprise Institute, China has invested 2.1 billion USD into the Venezuelan oil industry since 2016. Data from Morgan Stanley shows that the China National Petroleum Corporation (CNPC) holds stakes in a consortium with concessions covering 1.6 billion barrels of oil, while China Petroleum & Chemical Corporation (Sinopec) holds stakes covering 2.8 billion barrels.