Hundreds of oil executives have flocked to Venezuela’s capital city of Caracas this week for the first major industry event in the country in decades.
The Venezuela International Oil & Gas Summit is taking place nine months after the U.S. captured Nicolas Maduro, installed a U.S.-friendly administration, and vowed to open Venezuela’s oil reserves – the world’s biggest – to development by international companies.
The sold-out event has attracted executives from international majors, regional companies, and relatively unknown petroleum firms, all willing to tap Venezuela’s vast oil riches.
The interim Venezuelan administration, backed by the U.S., has amended the legal and fiscal hydrocarbon framework, making the terms and conditions for investing in Venezuela more attractive for foreign players who are now not bound by sanctions in their operations.
Some companies have already signed deals with Venezuela to explore and operate blocks in the oil-rich Orinoco Belt. Others are considering agreements and investments and are networking at the Venezuela International Oil & Gas Summit. More than 250 companies are attending the event, which has welcomed more than 600 senior-level delegates from more than 30 countries. The summit aims to enable market re-entry for companies and support investment decisions.
The change in Venezuela’s oil fortunes could be best exemplified by ExxonMobil.
Early this year, right after the U.S. extracted Maduro out of Venezuela in early January, Exxon’s CEO Darren Woods told an oil executives meeting with President Trump, “If we look at the legal and commercial constructs—frameworks—in place today in Venezuela, today it’s uninvestable.”
Since January, Venezuela has made changes to the legal, regulatory, and commercial frameworks and has started to attract a broad pool of investors in its oil industry.
Exxon is nearing the signing of a preliminary agreement to explore investments in several Venezuelan oil fields, the Wall Street Journal reported earlier this month, citing sources with knowledge of the discussions.
With a potential deal, Exxon would return to Venezuela two decades after it was forced to abandon the country, after then-president Hugo Chavez nationalized Exxon’s and ConocoPhillips’ assets in 2007. Exxon and ConocoPhillips still seek recovery of billions of U.S. dollars in damages due to the nationalization.
Other oil firms have been less hesitant than Exxon to declare Venezuela investable and sign agreements with state oil firm PDVSA to develop oilfields in the Orinoco Belt or offshore gas fields.
Chevron has pledged over $7 billion in investment over the next five years to more than double its production in Venezuela to about 600,000 barrels per day (bpd).
Continental Resources this month announced a Memorandum of Understanding with PDVSA to operate and develop the Ayacucho 2 Block in the prolific Orinoco Oil Belt. Ayacucho 2, which Continental Resources will operate with a 100% interest, has an estimated 30 billion barrels of resource in place.
Italy’s Eni signed a strategic contract in Venezuela to become the operator of the giant Junín-5 oil field in the Orinoco Belt. Junín-5, a heavy oil field containing 35 billion barrels of certified oil in place, currently produces around 12,000 bpd.
BP, ADNOC’s international energy investment company, XRG, and Qatar’s UCC Oil and Gas Holding were awarded a license for the Loran offshore gas field in Venezuela, which is northeast of the Orinoco Delta and near Venezuela’s maritime boundary with Trinidad and Tobago.
At the Venezuela summit this week, UCC’s head of upstream, Erik Keskula, said the company was in talks to possibly enter into new fields in Venezuela.
Colombia-based GeoPark, which operates in Venezuela, plans to invest $7 billion in the Bare oilfield to boost crude oil production to about 90,000 bpd by 2038 from 11,000 bpd now, CEO Felipe Bayon said at the Caracas conference on Tuesday.
This week’s oil conference in Venezuela will likely produce more deals and investment announcements as the U.S. and the U.S.-backed Venezuelan authorities signal the world’s largest crude reserve holder is open for business again.
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