International companies are flocking back to Venezuela, with deals worth billions getting closed under U.S. management of the country’s oil resources. Venezuela’s oil exports hit a seven-year high in March, and this may be just the beginning of a major rebound.
Big Oil was quick to signal interest in Venezuela’s oil—and natural gas—almost as soon as the United States ousted President Nicolas Maduro and effectively took over Venezuela’s oil industry. As early as January, Shell and BP were reported to seek a license to move forward with gas projects in Venezuela and Trinidad and Tobago.
For Shell, the main project of interest was Dragon, an offshore field that contains an estimated 4.5 trillion cubic feet of natural gas that Shell plans to eventually liquefy and export from its Atlantic LNG facility in Trinidad and Tobago. BP, meanwhile, last week signed a deal with PDVSA to develop the Cocuina-Manakin field that lies along the maritime border between Venezuela and Trinidad and Tobago. The supermajor and the Venezuelan state energy company will also explore together for gas in the Loran gas field.
The Loran-Manatee deposit is shared by Venezuela and Trinidad and Tobago, with 7.3 trillion cubic feet of gas in the Venezuelan portion and 2.7 trillion cubic feet in the Trinidad portion. The Cocuina-Manakin field contains an estimated 1 trillion cubic feet in reserves.
Spain’s Repsol is also returning to Venezuela after it signed a new deal with the country’s government, with plans to increase crude oil production in the country by 50% from current levels. Per media reports from April, the Spanish major secured licenses to return to Venezuela from the U.S. administration and agreed deals with U.S. energy companies to restore production, which currently averages some 45,000 barrels daily. Over the next three years, Repsol plans to triple that.
Italy’s Eni is also joining the Venezuelan oil party. Last month, the company’s chief executive, Claudio Descalzi, visited Caracas and met with President Delcy Rodriguez. Descalzi also signed a deal with PDVSA and the Venezuelan oil ministry for the joint development of a heavy crude field with PDVSA.
Junin-5 is located in the Orinoco Belt and contains 35 billion barrels of certified oil in place, making it one of the largest undeveloped heavy oil resources in Venezuela. Eni has long been tied to the project, which began production in 2013 but has been constrained by years of underinvestment, operational disruption, and sanctions-related uncertainty.
The latest to join the great oil industry return to Venezuela were two U.S. companies, Hunt Overseas Oil Company and Crossover Energy, which plan to operate in the Orinoco Belt, the South American country’s prime oil province of heavy and extra heavy crude. The deals were signed in the presence of Jarrod Agen, President Trump’s energy adviser and executive director of the National Energy Dominance Council, who arrived in Venezuela at the end of April on the first direct Miami-Caracas flight in nearly a decade.
The two companies will focus on three areas in the Orinoco Belt, namely Monagas, Anzoategui, and Barinas, producing not only oil but also associated gas, which will be used for power generation, potentially solving a major supply security problem for the country. Venezuela has been hit by repeated blackouts in the past few years.
Meanwhile, production is rising and so are exports. These reached their highest in more than seven years last month amid the global scramble for oil and rebounding oil production. The average daily ran at 1.23 million barrels, a 14% increase from the previous month. This was the highest rate of exports since before the United States hit Venezuela with sanctions during the first Trump term.
