A US-backed company’s takeover of Venezuelan oilfields, some of which were previously managed by Chinese firms, has dealt a blow to Beijing’s oil-backed loans and yuan trade networks, analysts say.
“Oil development in Venezuela is effectively dominated by the United States,” said Cui Shoujun, a professor at Renmin University of China’s School of International Studies.
“[China’s] likelihood of recovering its debts has decreased,” he added.
Venezuela was the largest recipient of Chinese state-backed lending in Latin America, having borrowed more than US$100 billion since 2000, according to US research lab AidData.
Most of these were structured as oil-backed loans, requiring shipments of crude to Chinese state buyers, with proceeds going into a Beijing-controlled account to service the debt.
A US-backed company’s takeover of Venezuelan oilfields, some of which were previously managed by Chinese firms, has dealt a blow to Beijing’s oil-backed loans and yuan trade networks, analysts say.
Through North American Blue Energy Partners (NABEP), a private company, the White House said the US had secured access to oilfields with 65 billion barrels of proven reserves in Venezuela – around one-fifth of the Latin American country’s total supply – including sites previously operated by Chinese firms.
“Oil development in Venezuela is effectively dominated by the United States,” said Cui Shoujun, a professor at Renmin University of China’s School of International Studies.
“[China’s] likelihood of recovering its debts has decreased,” he added.
Venezuela was the largest recipient of Chinese state-backed lending in Latin America, having borrowed more than US$100 billion since 2000, according to US research lab AidData. Most of these were structured as oil-backed loans, requiring shipments of crude to Chinese state buyers, with proceeds going into a Beijing-controlled account to service the debt.
