Firms including Chevron, ONGC, GE Vernova on track to sign final pacts in Venezuela, sources say
- Chevron seeks to add oil field in Orinoco Belt, sources say
- Trump says Chevron, Exxon Mobil, will invest in Venezuela
- Deals are separate from massive US-Venezuela deal announced last week
HOUSTON/CARACAS, Aug 31 (Reuters) — U.S. companies Chevron (CVX.N), opens new tab and GE Vernova (GEV.N), opens new tab, India’s ONGC, Italy’s Eni (ENI.MI), opens new tab and Colombia’s GeoPark (GPRK.N), opens new tab are on track to sign final agreements in Venezuela after months of negotiations to firm up energy projects in the OPEC country, five sources close to the preparations said.
Most of the pacts imply completion of a six-month migration of oil contracts to an amended hydrocarbon law now giving more flexibility to foreign firms to expand and operate oilfields, export the barrels and cash sale proceeds, the sources said. Others set terms for new energy and electricity projects.
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The list of companies lining up to sign has not been finalized as executives are rushing to complete negotiations at the last minute, two of the sources said.
Chevron’s agreements with Venezuela are expected to be “of significant size,” according to one of the sources.
The company is trying to add a block in the vast Orinoco Belt to its portfolio, which would allow one of its joint projects with state-run PDVSA to expand, two sources said, and Chevron also aims to negotiate an area in Monagas North that could become a key source of diluents for its extra-heavy oil output.
On Monday, U.S. President Donald Trump told reporters that U.S. energy majors Exxon Mobil (XOM.N), opens new tab and Chevron were among companies committed to invest in Venezuela. He did not elaborate.
A separate source said GeoPark has progressed in negotiations for the Bare heavy oilfield also in the Orinoco, which could give the company access to up to 1 billion barrels of reserves.
Eni, which shares the large Perla offshore gas project with Repsol (REP.MC), opens new tab and has a partnership with PDVSA for the Corocoro oilfield, said it was working with its Venezuelan counterparties and any other authorities to “support the revitalization of the country’s energy sector.”
Chevron, GE Vernova, ONGC, GeoPark, Venezuela’s oil ministry and state-run energy firm PDVSA did not immediately reply to requests for comment.
The agreements, which could be inked as early as this week, are separate from a massive Caracas-Washington pact announced last week for the U.S. to lock in a stake in 17 oilfields with some 64 billion barrels of proved reserves, a fifth of Venezuela’s total crude reserves.
The 17 fields, in the vast Orinoco Belt and Lake Maracaibo, are expected to produce as much as 1.5 million barrels per day (bpd) of crude in the long term, which would more than double Venezuela’s current output of 1.25 million bpd, authorities have said.
Asked when the Venezuela oil deal would lead to increased oil production, U.S. Vice President JD Vance said there was already “a significant increase in oil production out of Venezuela.”
“They’re (oil prices) sort of much more stable in part because what we see coming out of Venezuela,” he told reporters. “The 65 billion-barrel reserve is a big part of that we’re already seeing.”
Reporting by Marianna Parraga and Sheila Dang in Houston, Deisy Buitrago in Caracas and Nelson Bocanegra in Bogota; additional reporting by Jacob Bogage at Joint Base Andrews. Editing by Nathan Crooks, Timothy Gardner and David Gregorio
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Focused on energy-related sanctions, corruption and money laundering with 20 years of experience covering Latin America’s oil and gas industries. Born in Venezuela and based in Houston, she is author of the book “Oro Rojo” about Venezuela’s troubled state-run company PDVSA and Mom to three boys.
Deisy reports on oil and energy and general news from Venezuela’s capital, Caracas. She is also interested in reporting on politics and the environment. Deisy has been working with Reuters in Caracas since 2001, where she started writing on violent anti-government protests, the death of Venezuela’s former President Hugo Chávez, and problems at state oil company PDVSA, among other topics. She loves animals like dogs and cats!