One of China’s biggest state-owned oil companies is suing its Venezuelan counterpart in a US court, in a sign that Beijing’s patience over unpaid debts is running out as the Caribbean nation falls deeper into economic and social chaos. A US subsidiary of Sinopec is suing PDVSA, the Venezuelan state oil company, for $23.7m plus punitive damages over a May 2012 contract to supply steel rebar for $43.5m, half of which it says remains unpaid, according to court documents seen by the Financial Times.
The amount at dispute is small but it reveals a breakdown in relations of a far greater order. Sinopec agreed in September 2013 to invest $14bn in a Venezuelan oilfield, according to Rafael Ramírez, Venezuela’s oil minister at the time. It formed part of Chinese investments and loans that added up to more than $62bn in the oil-rich nation between 2007 and 2016. But Caracas has struggled to repay its debts as the oil price has fallen.