Is China falling behind?Speculators are viewing this partnership as a watershed moment in Russia's attempt to capitalize on energy opportunities ahead of China. Over the past few years, China has been aggressive in its attempts to participate in Venezuelan oil projects; however, to date it has not achieved as much progress as it might have liked. At present, it boasts one notably comparable inroad into that market, namely a JV between PDVSA and China National Petroleum. That agreement saw the China Development bank approve a $4-billion investment in Venezuelan energy firm Petrosinovensa, Reuters reported. The confirmation that Rosneft will be investing at least $10 billion over the coming years has effectively thrust China out of the spotlight. The company's CEO told local media that with Russian participation, overall oil production in the region could reach 50 million tonnes per year, with his company's share of that estimated to be around 15 million tonnes, or 500,000 barrels per day. The deal is a significant coup for Russia as Venezuela boasts some of the world's largest gas reserves, which, as per the government, amount to more than 195 Tcf. The South American nation is also the largest exporter of oil in the western hemisphere (and 10th largest in the world), and with 298 billion barrels, holds the world's largest proven oil reserves. High risk vs. high reward Although many deem Russia's progress as proactive in terms of boosting Venezuela's oil and gas output, others feel the deal will be largely influenced by — and at risk from — an often unpredictable political environment. While OilPrice notes that Venezuela is known as a “petro-state” in that oil revenues account for 94 percent of its export earnings, 50 percent of its budget revenues, and 30 percent of its GDP, its energy sector has struggled over the past decade and since 2001 its overall oil production has fallen by roughly 25 percent; since 1997, oil exports have dropped by almost 50 percent.