Venezuela News — Oil Comeback Gets Real

This week, Venezuela brought its pitch directly to the U.S. oil industry. The oil minister flew to Houston — the first senior Venezuelan official to visit the U.S. since January. A new 63-page rulebook for the oil law landed in company inboxes. Shell moved a team into a Caracas office building. And ExxonMobil is now in talks to take production rights in up to six Venezuelan fields.

Regulatory

Venezuela sent companies a 63-page draft rulebook for its new oil law. The draft replaces oil rules dating back to 1943. It covers taxes, field operation, contract disputes, and sets standards for refining, upgrading, and oil trading — areas previously handled only by PDVSA. Bloomberg

Politics

Venezuela’s oil minister and PDVSA’s top exploration executive traveled to Houston this week. The first time senior Venezuelan oil officials have visited the U.S. since Maduro was removed in January. Oil Minister Paula Henao and PDVSA E&P Vice President Jovanny Martinez spoke at the American Association of Petroleum Geologists (AAPG) conference in The Woodlands, Texas on May 19. Henao announced that contract disputes can now be settled outside Venezuela through international arbitration — a direct answer to the number-one concern companies have raised about returning to the country. Reuters

Energy Sector

Shell moved a team into a Venezuelan company’s offices to begin work on oil and gas fields in Monagas state. Following an agreement signed on March 5, Shell set up operations on an entire floor of Vepica’s headquarters in Caracas to advance the Carito and Pirital fields in northern Monagas. The project covers both onshore oil and gas and offshore gas; KBR and Baker Hughes signed separate agreements tied to the same initiative. Banca y Negocios

Venezuela’s oil exports hit 1.23 million barrels per day in April. The highest level in over seven years as the government works to show major oil companies that the legal environment is now safe enough to invest. The government’s main new offer is international arbitration for contract disputes, replacing Venezuelan courts. Shell, BP, Repsol, and Eni are already active in offshore gas and heavy oil projects. The country was previously described by investors as “effectively uninvestable” due to weak legal protections. OilPrice.com

Deal Flow

ExxonMobil is in talks to take production rights in up to six Venezuelan oil fields. The New York Times reported on May 21 that a deal could be announced this month. ExxonMobil left Venezuela in 2007 when the Chavez government seized its assets; CEO Darren Woods called the country “uninvestable” as recently as January, but has shifted that position as Venezuela introduced international arbitration rights and a new oil law. President Trump has pushed U.S. energy companies to invest $100 billion in Venezuela. Reuters

Opinion

More than 300 oil and gas professionals gathered in Houston this week for the first major industry conference in the US dedicated entirely to Venezuela. The message given was clear: the resources are real, but trust still needs to be earned. Venezuela holds 19% of the world’s proven oil reserves and 192 trillion cubic feet of gas, but less than 20% of that has been developed. Speakers from Repsol, S&P Global, Rystad Energy, and the U.S. Department of Energy presented that legal certainty, contract durability, and workforce rebuilding are what will determine whether this opening turns into real investment. LinkedIn / AAPG

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Disclaimer

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