Repsol to increase Venezuelan oil production after sanctions relief with new joint venture

Fabiola Zerpa, Bloomberg December 18, 2023

(Bloomberg) – Venezuela and Spain’s Repsol SA signed a new contract for a jointly-run oil venture as the Andean nation seeks to ramp up production after the U.S. eased sanctions.

Venezuela's Perla field (Source: Repsol)

Venezuela’s Oil Minister Pedro Tellechea and Repsol’s head for upstream, Francisco Gea, signed an agreement during an event in Caracas Monday that grants the European major more operational and finance controls over their ventures in the oil fields of Petroquiriquire Occidente and Oriente. 

Repsol is the third oil giant to sign new agreements with Venezuela since Chevron Corp. was granted a special license to resume production there. France’s Etablissements Maurel & Prom SA of France also signed a new contract last month.

“This agreement is a continuation of our 30-year relationship with Venezuela,” Gea said during an event at Petroleos de Venezuela SA headquarters. “We’ve been here during different times and hope to still be here in the future.”

Repsol sent a negotiating team to Caracas in recent months to explore options to secure access to heavy crude for its oil refineries in Spain, including new oil fields.

The Madrid-based company is also reviewing long term debt owed by PDVSA for oil and gas sales. It includes debt accrued by PDVSA on natural gas sales from the offshore Cardon IV venture that Repsol runs in partnership with Rome-based Eni. The project produces enough gas to meet nearly a third of Venezuela’s demand, according to Ruben Perez, director at Chemstrategy, an energy consultancy in Caracas.

While easing sanctions has opened a path for oil majors to return to Venezuela, President Nicolás Maduro has yet to meet all the terms laid out by the U.S., prompting Biden officials to assess the potential need to reimpose sanctions.

Lead image: The Perla field (Source: Repsol)

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