Venezuela Struggling To Keep Its Oil Expansion Going

Venezuela Struggling To Keep Its Oil Expansion Going

Chinese oil contractors have stop to work on a Venezuela expansion project because they have not been paid. Which is creating another layer of issues for Nicolas Maduro regime including energy ventures backed by allies.

China Huanqiu Contracting and Engineering Corporation, an affiliate of government-run China National Petroleum Corp., have stated Sinovensa joint venture has suspended work to expand a crude blending facility by 57% to 165000 bpd, according to a document seen by Bloomberg and a person familiar with the matter.

That’s in contrast to comments from state-controlled Petroleos de Venezuela SA last month announcing a second expansion to take output to 230,000 bpd at the project, which is jointly owned by PDVSA and CNPC — China’s biggest energy company.

This issue is another blow to Venezuela, which is increasingly reliant on Russia and Chinese oil companies to help them turn around the oil & Gas industry, but the struggle is still present due to the economic embargo from the U.S. administration. Chevron Corp and four U.S. oilfield service companies will stop working in the country by the end of October unless the sanctions waiver is extended. It is affecting nearly half the drilling rigs operating in the country.

A project manager at HQC — as the Chinese contractor is known — said in a notification to Sinovensa it was owed more than $52 million in invoices dating back to 2018, and that it was suspending activities from Sept. 3. The JV is a key project in Venezuela’s Orinoco region that boasts the largest oil reserves on the planet and currently accounts for about half of the country’s remaining production. Source: