Continental Resources has signed a memorandum of understanding with Venezuela's state oil company to develop a 126,000-acre section of the Orinoco Belt holding an estimated 30 billion barrels of reserves. The deal follows a wave of dealmaking in Venezuela's oil patch since the U.S. ousted former President Nicolas Maduro eight months ago.
Continental signs deal for Orinoco Belt acreage
Continental Resources signed a memorandum of understanding on Wednesday with Petróleos de Venezuela S.A. to develop and operate a 126,000-acre area of the Orinoco Belt holding an estimated 30 billion barrels of reserves. The Orinoco Belt contains most of Venezuela's 303 billion barrels of oil reserves.
The Oklahoma City-based company plans to advance the memorandum into a long-term agreement with PDVSA in the coming weeks. Continental is one of the largest privately held oil and natural gas producers in the world.
Trump's push meets industry hesitation
The agreement comes eight months after the U.S. ousted Venezuela's former President Nicolas Maduro in a military raid. President Donald Trump has called for U.S. oil companies to help develop Venezuela's reserves, but most publicly traded oil majors remain hesitant.
According to CNBC: Continental said it undertook an "independent evaluation of opportunities" in Venezuela after Trump's call for American energy companies to invest in the country. The company said Venezuela's reform of the law governing its oil industry helped it decide to invest. Continental founder Harold Hamm has been a Trump supporter and donor.
Other producers move into Venezuela
Dealmaking in Venezuela's oil sector has accelerated in recent weeks. Trump said last month that the U.S. had secured majority control over more than 65 billion barrels of Venezuela's crude reserves.
The Venezuelan government granted an obscure private oil company, North American Blue Energy Partners, concessions to develop those reserves, and NABEP in turn granted the U.S. government a 35% ownership stake along with a guaranteed supply of its crude production. Chevron, meanwhile, plans to more than double its production in Venezuela by 2031 through a $7 billion investment and expansion into two additional oilfields.
Source: Continental Resources
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