After Chevron’s exit, Venezuela seeks alliances with China and Turkey

Photo: Ministerio del Poder Popular de Hidrocarburos.

Following the departure of the U.S. company Chevron from Venezuela, President Nicolás Maduro announced the launch of the Absolute Productive Independence Plan, aimed at offsetting the loss of revenue caused by the recent withdrawal of this oil company. This plan has previously been used in Venezuela to mitigate the negative effects of international sanctions.

Currently, the country’s crude oil production stands at 950,000 barrels per day. However, due to the current situation, production is expected to drop by at least 150,000 barrels per day. It is worth noting that Chevron was involved in managing four joint ventures in partnership with the state-owned Petróleos de Venezuela S.A. (PDVSA), which operated local oil fields and had tripled their production in recent years.

Given this scenario, questions arise about whether former U.S. President Donald Trump’s announcement will impact the operations of other non-American companies present in Venezuela that operate under the “Comfort Letter,” a special license for oil and gas projects. Among these companies are Repsol, Maurel & Prom, and Eni, all of which have repeatedly expressed their intention to continue operations in Venezuela.

Meanwhile, Caracas can only rely on what PDVSA is able to produce. According to various reports, the state-run corporation is plagued by corruption and political interference as a result of the Chavista regime. The last publicly audited financial data from the company dates back to 2016, and today, according to multiple sources, PDVSA carries a 20 billion dollar debt.

Nevertheless, reports indicate that over the past three years, PDVSA has begun improving its internal processes by incorporating newly graduated professionals, which has allowed it to regain some relevance in both light and heavy crude fields. Currently, the company produces 650,000 barrels of oil per day, a figure significantly lower than the 3.2 million barrels it produced in the late 20th century, before Hugo Chávez’s administration.

Following Chevron’s exit, Venezuela’s economy is expected to weaken due to ineffective government management and international sanctions, leading to marginal economic growth in 2025 and an annual inflation rate exceeding 100%.

This is largely due to Venezuela’s dependence on oil production, along with internal political conflicts, expropriations, and social issues, including the mass migration of over seven million people, which has reduced industrial activity to just 30% of its total capacity. Additionally, even without international sanctions, several oil companies prefer not to invest in Venezuela due to its current conditions.

According to economist and academic Francisco Rodríguez, “A significant portion of the country’s production recovery in recent years has been driven by Chevron, and that progress could be lost.” Furthermore, the tightening of international sanctions could result in the government’s inability to address operational contingencies and compensate for deficiencies. This is due to the implementation of “over-compliance,” a method used by U.S. companies to strictly adhere to Washington’s sanctions against certain countries, ensuring legal protection.

One possible outcome of this situation is that, with an oversaturated market, Venezuela may resume offshore crude sales in remote locations through intermediaries offering discounted prices. A sign of this trend is the increase in medium- and small-sized energy operators with little market recognition.

In response, several companies have expressed interest in taking over Chevron’s operations in Venezuela, including the Indian company Reliance and China Petroleum. According to Francisco Rodríguez, sanctioned countries may eventually adapt to operating under restrictions, while nations like China and Russia would have no issue engaging in business with them.

Main Source:

Maduro busca acuerdos con China y Turquía para mitigar la salida de Chevron de Venezuela – El País

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EE.UU. pone fin a licencia de Chevron para exportar petróleo venezolano: ¿qué significa para Venezuela? – CNN Español