More than 600 delegates from over 250 companies packed Caracas this week for Venezuela's first major oil summit in decades, as foreign producers move back into a country holding the world's largest proved crude reserves. Chevron, Eni, Continental Resources and GeoPark have already signed investment deals, and ExxonMobil is reportedly close to a preliminary agreement of its own.
Hundreds of oil executives flocked to Caracas this week for the Venezuela International Oil & Gas Summit, the country's first major industry event in decades. The sold-out gathering drew more than 600 senior delegates from over 250 companies across more than 30 countries.
The summit comes nine months after the United States captured Nicolas Maduro, installed a US-friendly administration, and vowed to open Venezuela's crude oil reserves to international development. Venezuela holds about 303 billion barrels of proved crude reserves, the largest reported total in the world.
New fiscal terms unlock investment
The interim administration has amended the country's legal and fiscal hydrocarbon framework, and foreign firms operating there are no longer bound by sanctions. Early this year, ExxonMobil CEO Darren Woods called the legal and commercial setup in Venezuela "today it's uninvestable." Since then, Exxon is nearing a preliminary agreement to explore investments in several Venezuelan oil fields, the Wall Street Journal has reported. A deal would mark Exxon's return two decades after Hugo Chavez nationalized its assets in the country in 2007.
Rivals move faster than Exxon
Other producers have moved without Exxon's hesitation. Chevron has pledged over $7 billion in investment over five years to more than double its Venezuelan output to about 600,000 barrels per day. Continental Resources signed a memorandum of understanding to operate the Ayacucho 2 Block, which the company says holds an estimated 30 billion barrels of resource in place.
Italy's Eni signed a contract to operate the Junín-5 field, which holds 35 billion barrels of certified oil in place and currently produces around 12,000 barrels per day. BP, ADNOC's XRG and Qatar's UCC Oil and Gas Holding were awarded a license for the Loran offshore gas field, and UCC's head of upstream, Erik Keskula, said the company is in talks to possibly enter additional Venezuelan fields.
Colombia-based GeoPark plans to invest $7 billion in its Bare oilfield, aiming to lift output to about 90,000 barrels per day by 2038 from 11,000 barrels per day now, chief executive Felipe Bayon said at the Caracas conference.
With the summit still underway, more deals and investment announcements are likely as the US-backed authorities signal that the world's largest crude reserve holder is open for business again.
Source: Oilprice.com
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