Venezuela: Chinese Joint Oil Venture Partner Installs Drill Rig in Lake Maracaibo

Caracas, September 9, 2025 (venezuelanalysis.com) – China Concord Resources Corp. (CCRC) has installed a self-elevating offshore oil platform in Lake Maracaibo, Zulia state, western Venezuela.

According to multiple reports, the Alula jackup rig was towed into position last week ahead of exploration and drilling operations in projects alongside Venezuela’s state oil company PDVSA.

The privately-owned China Concord secured a 20-year deal to run the Lago Cinco and Lagunillas Lago oilfields and will reportedly invest US $1 billion with the goal of raising production from the present 12,000 barrels per day (bpd) to 60,000 bpd by the end of 2026. The projects aim to develop 500 wells.

The Hong Kong-based corporation is said to have brought skilled personnel to engage in infrastructure rehabilitation, as well as reopening and drilling new wells.

Venezuela’s oil industry remains heavily targeted by US sanctions, with measures including financial sanctions, an export embargo and secondary sanctions in an effort to strangle the Caribbean country’s most important revenue source. 

Following years of steady recovery, the country’s output has hovered around 900,000 bpd in 2025. Chinese refineries have been the main destinations for Venezuelan crude in recent months, with Caracas forced to levy significant discounts and resort to intermediaries in order to circumvent sanctions.

With the threat of coercive measures driving away some of PDVSA’s most important partners, including China’s state-owned CNPC, Caracas has turned to alternative, smaller firms, often with no recorded past experience in the energy sector.

The Nicolás Maduro government has likewise offered more favorable arrangements to corporate partners in a bid to attract investment. China Concord reportedly secured a so-called “productive participation contract” (CPP), a more flexible agreement than traditional joint ventures which grants private partners greater control over oilfield operations and sales.

The Lago Cinco and Lagunillas Lago projects are expected to yield a combination of light and heavy crudes, with the former set to be allocated to PDVSA for domestic use and the latter for export to Chinese refineries.

China Concord Petroleum Co. (CCPC), a separate subsidiary from the same logistics corporation as CCRC, was sanctioned by the US Treasury Department in 2019 on allegations of transporting Iranian oil. The firm is also reported to have chartered tankers to lift Venezuelan crude in recent years.

The Alula rig, built in China in 1980, is the first significant oil infrastructure development in western Venezuela in several years. Jackup rigs have been favored by the industry for shallow water drilling since the 1960s.

Lake Maracaibo was at the center of Venezuela’s energy industry for almost a century following the discovery of oil in the 1920s. In recent decades, operations have diminished due to the depletion of wells and a lack of investment as PDVSA prioritized the Orinoco Oil Belt in eastern Venezuela. The belt’s extra-heavy crude deposits constitute the largest certified reserves on the planet.

(The original text was amended for accuracy on December 31, 2025)