China Puts Oil Over Politics in Bid to Lift Venezuela Output
China’s move to invest $2.2 billion in Venezuela for a share of increased crude production shows a desire to extract itself from the country’s political fights while securing access to its vast oil reserves.
The deal, which represents China’s first economic support this year for the beleaguered South American country, would help Venezuela reverse declining oil output by improving its infrastructure. In exchange, Venezuela would promise to send its largest creditor even more oil -- 800,000 barrels a day -- compared with about 550,000 in September. The deal will be finalized in mid-December.
While Maduro hailed the Venezuela pact as proof of China’s commitment, its focus on oil production illustrates a wariness in Beijing against assuming more risk with a socialist government that’s struggling to avoid default. Financing oil infrastructure helps China ensure a long-term presence in a country that hosts the world’s largest proven crude reserves and sits in the U.S.’s strategic backyard.