Venezuela’s state-run oil company, PDVSA, has signed at least nine new contracts with foreign service providers, including two Chinese firms, to sustain oil revenues following Chevron’s exit due to U.S. sanctions. These deals, a shift from past practices, allow private firms to operate existing wells and sell the output independently—previously a right reserved for the state. At least one company withdrew over licensing issues with the U.S.
The move reflects President Nicolás Maduro’s strategy to stabilize the economy and replace lost production from Chevron, which had contributed nearly a quarter of the nation’s oil output.Following the expiration of Chevron’s license to produce and export Venezuelan crude to the U.S. in April, and the lapse of permits for major U.S. oil service firms in May, Venezuela’s PDVSA has signed new deals with foreign companies to sustain oil production. These agreements give foreign firms control over oil blocks in key regions, with PDVSA retaining at least a 50% stake and paying its share through crude.
The companies include Aldyl Argentina SA and Chinese firms Anhui Guangda and China Concord. A U.S. firm, North American Blue Energy Partners, signed a deal but withdrew due to licensing issues. The agreements mark a strategic shift, granting private firms more operational and sales control, and are seen by Venezuela as a way to bypass U.S. sanctions—potentially using cryptocurrencies and alternative payment methods.Venezuela is turning to private firms unfazed by U.S. sanctions to sustain oil output, says lawmaker William Rodríguez. New deals, signed under Maduro’s anti-blockade law, bypass National Assembly approval and traditional legal limits. Critics call the move unconstitutional. Production is around 1 million barrels daily but may drop by half due to U.S. policy impacts, per Oxford Economics.
Some experts see a smaller drop in Venezuela’s oil output, with Francisco Monaldi estimating an 11% decline by year-end. Chevron can still maintain equipment despite ending production. PDVSA expects its nine new 20-year contracts to yield 600,000 barrels daily with $20 billion in investment. More deals are planned, partly reversing Chavez’s oil nationalization. Monaldi notes past failures but says better terms now make success more likely—if PDVSA can ensure steady crude supply to risk-tolerant partners.
