The alliance between Venezuela and China resulted in tens of billions of dollars in oil-backed loans, equity stakes in oil assets, and infrastructure contracts. Documents from Transparencia Venezuela reveal an opaque debt, limited investment progress, and a growing link to corruption and sanctions evasion schemes. The oil sector, key to Petróleos de Venezuela S.A. (PDVSA), became a strategic piece of Chinese policy, but at considerable cost to Venezuela.
China’s strategy for Latin America followed a similar pattern to that of the Belt and Road Initiative (BRI): a combination of oil-linked loans, equity stakes in energy companies, and turnkey infrastructure contracts. In the case of Venezuela, this formula was activated with greater intensity from 2007 onwards, establishing a financial architecture where loans were guaranteed by future oil shipments and where the participation of Chinese companies (such as China National Petroleum Corporation – CNPC) ensured access to assets.
According to Transparencia Venezuela, between 2007 and 2016, Chinese loans exceeded USD 62.146 billion, under the modality of “oil loans.” This placed Venezuela as the recipient of 44% of the total loans that China granted in the region during that period.
The report from Transparencia Venezuela documents that, as of 2018, China had financed the Venezuelan hydrocarbon sector with approximately USD 25 billion, distributed in investments of some USD 3.7 billion, loans amounting to approximately USD 12 billion, and other contributions of USD 9.3 billion. Additionally, the NGO points out that of the more than USD 69 billion projected (including other sectors until 2018), by the end of 2024, the debt with China was estimated at least USD 15 billion. On the other hand, Chinese direct investment has practically come to a standstill in the last seven years: “Venezuela did not receive a single cent of the more than US$48 billion that China invested in Latin America between 2020 and 2023,” says Transparencia Venezuela.
Within the energy framework, the joint venture PetroSinovensa (PDVSA-CNPC) acts as the spearhead of China’s presence in the exploitation of extra-heavy crude oil, particularly in the Merey blend from the Orinoco Oil Belt. This shareholding allows China to secure not only supply but also logistical and operational control, which coincides with the BRI pattern: equity + credit + infrastructure.
Although the Transparencia Venezuela report does not provide all the technical details of the joint venture, the context of Chinese loans to the hydrocarbon sector fits into this logic.
The report from Transparencia Venezuela warns that opacity characterized both financing schemes and contracts. It points out that the “agreements that undermined democracy in Venezuela” included nearly 500 agreements between 2000 and 2019, many without public accountability. As a key finding, the NGO warned of “a network of ghost oil tankers and diversion of resources” in 2025, where at least 24 vessels operated without identifiers and facilitated maneuvers to evade international supervision and sanctions, with destinations or stopovers in China, among others. These patterns combine the risk of corruption, embezzlement of public funds, and negotiations that favored Chinese contractors or related intermediaries, making the oil alliance also a vehicle for weak governance.
Among the consequences for Venezuela and the oil industry, we can mention:
- The combination of growing debt, committed future oil shipments, and low inflows of new investment limits the room for maneuver of the oil business and the Venezuelan state.
- Chinese participation in critical oil assets could lead to a loss of operational and commercial autonomy, especially in a context where the Venezuelan industry is at risk due to sanctions, declining production, and lack of maintenance.
- Corruption and lack of transparency hinder recovery, discourage serious foreign investment, and make fair renegotiations difficult.
- The strategic alliance, although promoted with big headlines (and backed by Chinese diplomacy), has not translated into a solid operational or financial recovery for the Venezuelan oil sector, according to Transparencia Venezuela.
The Venezuela-China alliance in the oil sector is a clear example of how the Silk Road doctrine has been applied outside Asia: with oil-conditional financing, participation in strategic assets, and close corporate ties. However, as Transparencia Venezuela documents, the result for the country has been marked by growing debt, stagnant investment, opaque contracts, and corrupt practices. For PDVSA and Venezuela to reverse this model, it will be essential to adopt strict governance, full transparency, and diversification of partners, avoiding dependence on a single financing model that has mortgaged a large part of future oil production.
