Venezuela Expects to Sign Gas Licenses by Year-end, Oil Minister Says

Mayela Armas and Deisy Buitrago
Monday, July 24, 2023

Venezuelan expects to sign licenses by year-end for developing the nation's vast natural gas reserves, oil minister Pedro Tellechea said on Friday, even amid U.S. sanctions.

Most of the South American country's gas reserves remain undeveloped after decades of insufficient investment, contract changes and - in recent years - U.S. sanctions to oust President Nicolas Maduro. But new officials running the oil ministry and PDVSA want to encourage new investment and unfreeze projects.

Tellechea said talks between state oil company PDVSA  and companies including Italy's Eni, Spain's Repsol and France's Maurel & Prom had progressed, but there was still a need to agree to some terms in order to get licenses ultimately issued. 

"We must turn into a gas exporter," he said during a conference in Caracas. "We are making the first steps."

Deals for exporting gas from the country would need to receive green light from the United States, in compliance with the sanctions framework.

Following a U.S. license in January, Trinidad and Tobago has held several discussions with Venezuela about the joint development of a promising offshore gas field near the maritime border between the two countries. 

Oil major Shell Plc, which produces in Trinidad, could operate the Dragon gas field in Venezuela if Maduro's government extends it a license, Trinidad officials have said.

Venezuela is producing 831,000 barrels of crude per day (bpd) this month and expects to increase to 1 million bpd by year-end. The country aims to reach 1.76 million bpd of output in 2024, Tellechea said. 

The minister also said that debt payment agreements with China remain unchanged, under a grace period negotiated by the parties years ago due to sanctions. Venezuela has paid debt service in recent years by shipping crude to that country.

(Reuters - Reporting by Deisy Buitrago, Mayela Armas and Vivian Sequera; Writing by Marianna Parraga; Editing by Alison Williams)

Categories: Energy Activity South America Gas Regulations

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