Chevron, Eni and GE Vernova signed expansion pacts in Caracas on Wednesday to boost Venezuela's crude oil output, which currently trails far behind its 1990s peak. The deals sit alongside a separate US-Venezuela agreement and a $100 billion investment push that Washington says will double the country's production.
Chevron, Eni and GE Vernova signed a wave of oil and power-sector expansion pacts in Caracas on Wednesday, in a ceremony overseen by interim President Delcy Rodriguez and US Energy Secretary Chris Wright. The pacts mostly cover project expansions negotiated with Venezuela's Oil Ministry and state oil company PDVSA as part of a migration of dozens of energy contracts under a sweeping oil reform approved in January. They are separate from a recently unveiled Caracas-Washington deal giving the US access to 17 oilfields.
Billions committed to lift Venezuela's output
Venezuela currently produces about 1.25 million barrels per day, far short of its 3 million bpd peak in the late 1990s, after most oil majors avoided major investment following a 2007 nationalization. Chevron plans to invest more than $7 billion to double its output to about 600,000 bpd over the next five years, expanding its joint ventures with PDVSA. Eni, according to industry sources, will invest $1.5 billion to expand into the Junin 5 heavy oil area of the Orinoco Belt, where output currently runs at about 12,000 bpd; the company's overall Venezuela production target is 400,000 bpd by the end of the decade.
Eni restructures its venture, other firms sign on
As part of its deal, Eni's existing joint venture with PDVSA will transition into a 25-year production-sharing contract, the company said. Eni CEO Claudio Descalzi summed up the goal during the ceremony. According to Reuters: "What we need is not just signing papers, we need barrels."
Other agreements included an oilfield development pact with energy firm Primavera and an exploration agreement with Denver-based Aspect Holdings, whose chairman said the firm will develop several fields in Venezuela over the coming years. GE Vernova signed a separate power-sector alliance, which Rodriguez highlighted given Venezuela's electricity deficit that has left households without power for hours.
Sanctions relief and a separate deal in the background
Venezuelan businessman Alejandro Betancourt was absent from the ceremony, days after his company NABEP signed a separate deal with Washington granting access to a fifth of Venezuela's oil reserves. Wright and Rodriguez defended the choice of the NABEP partnership, with Wright noting the company is Venezuela's second-largest oil producer and adding that Washington will keep strict control over the flow of funds.
Rodriguez also said during the press conference that the US and Venezuela are working to lift sanctions on the country.
Source: Commodities & Futures News
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