Venezuela signed five agreements with British oil major Shell on Thursday to advance oil and gas projects, including the company's participation in the coveted 7-trillion-cubic-feet Loran offshore gas field, the government said.
The country had signed preliminary agreements for these and other projects earlier this year with Shell, one of the few large foreign companies that has taken early advantage of Venezuela's new energy investment opportunities following the U.S. capture of President Nicolas Maduro in January.
This time, the parties secured Shell's participation in Loran, a reservoir that extends into Trinidad and Tobago's waters. They also agreed to a technical alliance greenlighting procurement and output expansion at oilfields in Monagas North and to a separate pact to buy equipment and parts to reduce gas flaring.
Loran and another Venezuelan gas project involving Shell, the 4.2-TCF Dragon, are expected to allow the South American nation to inaugurate exports of offshore gas, of which it has abundant reserves to develop, starting with supplies to Trinidad for processing into liquefied natural gas.
The pacts move Shell, which had withdrawn from projects and closed offices in Venezuela, to the top of state company PDVSA's list of partners for key energy developments.
"We are taking a historic step by signing this license for phase one of the Loran field's development plan," interim President Delcy Rodriguez said at the signing ceremony, broadcast on state TV.
Oil from the fields to be produced by Shell will increase the availability of diluents for producing the country's flagship exportable Merey crude and supplying it to domestic refineries, the government said in the release.
British BP is also set to participate in the Loran gas field and in the neighboring Cocuina-Manakin offshore gas project, according to separate agreements with the Venezuelan government signed in April.
(Reuters - Reporting by Deisy Buitrago and Vivian Sequera; Writing by Marianna Parraga; Editing by Bill Berkrot and Lincoln Feast)