Venezuela’s Oil Revival Accelerates as Foreign Companies Return

Hundreds of oil industry executives have converged on Caracas for the Venezuela International Oil & Gas Summit, marking the first major petroleum-sector gathering in the country in decades. The summit follows a political transition nine months ago in which U.S. forces removed Nicolás Maduro and installed an interim administration that has since revised Venezuela’s hydrocarbon legal and fiscal framework to be more attractive to foreign investors. The sell-out conference has drawn a wide cross-section of firms — from established international majors to regional players and lesser-known operators — with more than 250 companies and over 600 senior-level delegates from over 30 countries in attendance. Venezuelan authorities and visiting executives are using the event to finalize deals, conduct negotiations and network as companies consider re-entering a market that was effectively off-limits under prior sanctions regimes. Several companies have already announced or signed deals with state oil firm PDVSA to develop blocks in the Orinoco Belt and offshore gas fields. Chevron has pledged in excess of $7 billion to grow its Venezuelan output to roughly 600,000 barrels per day over the next five years. Continental Resources signed a memorandum of understanding to operate and develop the Ayacucho 2 Block in the Orinoco Belt with a 100% working interest; that block is reported to contain about 30 billion barrels of resource in place. Italy’s Eni agreed to operate the large Junín-5 field, which holds around 35 billion barrels of certified oil in place and currently produces about 12,000 bpd. Major western firms are also moving cautiously back into Venezuela. ExxonMobil, which left the country after assets were nationalized two decades ago, has been reported to be close to a preliminary agreement to explore investments in several fields. Other consortiums involving BP, ADNOC’s investment arm, XRG and Qatar’s UCC received a license for the Loran offshore gas field near the Orinoco Delta. At the summit, company executives including UCC’s head of upstream and GeoPark’s CEO outlined ongoing talks and multi-billion-dollar investment plans to boost production over the coming years. Organizers and participants expect the conference to spur further announcements as the interim government continues to promote legal and commercial changes that remove previous restrictions and sanctions barriers, aiming to reopen Venezuela’s oil sector to broad international capital and technical partners.