Venezuela Pleads for China to Buy Oil as Trump Kicks Chevron Out

Nicolas Maduro Photo by Gaby Oraa /Photographer: Gaby Oraa/Bloomber

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(Bloomberg) — Venezuelan Vice President Delcy Rodríguez asked Chinese officials to step up oil purchases during a visit to Beijing last week, as the nation seeks to preempt the US-ordered exit of Chevron Corp. and other foreign energy operators next month.

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Rodríguez, who also runs Venezuela’s energy ministry, met with Chinese Vice President Han Zheng and China National Petroleum Corp. Chairman Dai Houliang in Beijing on Thursday and Friday of last week, according to Chinese state media. During the meetings, Rodríguez asked China to increase oil purchases and help provide the diluent and light crude needed to process and export Venezuela’s tar-like oil, according to people briefed on the matter. 

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China, Venezuela’s biggest creditor, is seeking to renegotiate terms on its contracts, requesting an even steeper discount on oil purchases, some of the people said.

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Venezuela is in an increasingly vulnerable position as US President Donald Trump targets the oil that serves as major source of government revenue, part of his effort to ratchet up pressure on Nicolas Maduro’s regime. 

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Trump, who considers Maduro an “extraordinary threat” to US national security, has imposed tariffs on countries that import oil from the South American nation, making negotiations with allies like China even more sensitive. He has also revoked licenses for foreign energy companies operating there, including Chevron, Repsol SA, Eni SpA, and Maurel & Prom.

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Press officials for Venezuela’s presidency and PDVSA didn’t respond to requests for comment on the visit. The Ministry of Foreign Affairs in Beijing did not respond to a request for comment on each side’s demands. China is currently on its annual May Day public holidays.

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To avoid exposure, at least four zombie vessels — ships that take on the identities of scrapped tankers to appear legitimate and avoid scrutiny from authorities in the US and elsewhere — have sailed off of the José and Amuay oil export terminals in Venezuela in recent weeks, according to ship-tracking data provided by Starboard Maritime Intelligence and analyzed by Bloomberg. 

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Asia’s largest economy was already the No. 1 buyer of Venezuelan oil last month, with 10 tankers taking an average of 461,000 barrels per day to processors, according to US Customs and shipping data. 

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About 5% to 10% of those exports already go toward paying down debt, according to people familiar with the matter. Public data supports estimates that Beijing lent upwards of $60 billion in oil-backed loans to Venezuela through state-run banks until 2015, reaching a level of diplomatic and financial investment unmatched elsewhere in Latin America and perhaps the world.

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China became a key lender to Venezuela in 2007, when it first provided funds for infrastructure and oil projects under late President Hugo Chávez.

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“We’re reaching a new level with the agreements we’re going to sign, some of which were already signed there,” Rodríguez said in televised broadcast alongside Maduro on Monday. “That’s a reserved agenda that we can’t mention, it’s confidential.”

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“I can tell you that we’re really extremely happy with this Chinese tour, to be able to reaffirm our friendship, carry your message and present a new concrete work agenda,” she added.