Chevron, India’s ONGC, GE Vernova, Eni and GeoPark are preparing to sign final energy agreements in Venezuela, bringing new foreign investment into the country’s oilfields and power infrastructure, Reuters reported Monday, citing five sources close to the preparations.
Venezuela has spent the past six months rewriting existing oil contracts under its amended hydrocarbons law, giving foreign companies more operational flexibility over fields previously dominated by PDVSA.
The new terms allow companies to export their own crude and receive the proceeds directly, a major departure from the state-controlled model that governed the industry for decades. Several of those contracts are now ready for signature, along with separate agreements covering new oil and power projects.
Chevron’s agreements are expected to be “of significant size,” according to one Reuters source. The U.S. major is seeking an additional block in the Orinoco Belt that would allow one of its joint ventures with PDVSA to expand, as well as an area in northern Monagas that could supply diluents needed for Venezuela’s extra-heavy crude.
ONGC is preparing to invest about $200 million in the San Cristobal field, where the Indian state producer is targeting a tenfold increase in production. Venezuela has also recently signed agreements with SLB and Hunt Oil as Caracas tries to rebuild an industry that still requires enormous amounts of foreign capital after years of underinvestment.
The agreements are separate from the much larger U.S.-Venezuela pact announced last week covering stakes in 17 oilfields with about 64 billion barrels of proved reserves, according to Reuters. Washington had previously been negotiating direct ownership in selected Venezuelan fields under an earlier proposal involving roughly 90 billion barrels.
Chevron maintained operations in Venezuela through the Maduro years, but ExxonMobil and ConocoPhillips have yet to return to operating oilfields as negotiations over fiscal terms and legal protections continue. Smaller operators have moved more quickly, with SLB and Hunt among the companies signing agreements in recent months.
By Charles Kennedy for Oilprice.com
