Venezuela’s state oil company PDVSA has signed two agreements with Nigerian firm Veneoranto to advance in the exploration of offshore natural gas reserves.
The ceremony took place on Thursday at Miraflores Presidential Palace. Venezuelan Oil Minister Pedro Tellechea and Veneoranto representative Arthur Eze put pen to paper on deals to study the “technical-economic feasibility” of the Barracuda gas field, located in the Gulf of Venezuela in the country’s west, and the Boca de Serpiente field located in the Deltana Platform on the easternmost maritime border.
According to Venezuelan authorities, the two fields hold a combined 30 trillion cubic feet (tcf) of natural gas. The agreements aim to certify the reserves and possibly move Venezuela to fourth place among the largest natural gas deposits on the planet. The country currently has 200 tcf certified.
Venezuelan state media added that the agreements establish conditions for the future issuing of gas exploration licenses.
Venezuelan President Nicolás Maduro celebrated the new investments and reiterated calls for foreign partners to become involved with the Caribbean nation’s energy sector.
“Venezuela is well prepared in terms of mutual respect and juridical fairness, in order to sign win-win contracts with private sector partners,” he said during a televised broadcast. The Venezuelan president highlighted a portfolio of opportunities for international investors in the oil and gas sectors.
“I am pleased that the natural gas processes are accelerating,” Maduro added. “Soon enough we will be exporting natural gas to Africa.”
For his part, Tellechea highlighted that foreign investors “trust the country, trust the industry and will help Venezuela continue to achieve economic growth and stability.”
Veneoranto is a newly created subsidiary of Atlas Oranto Petroleum, a Nigerian multinational corporation owned by Eze, one of Africa’s wealthiest businessmen. According to its LinkedIn profile, Abuja-headquartered Atlas Oranto currently operates projects in 11 African countries.
Venezuela has courted private sector investment to jumpstart an energy industry heavily targeted by US sanctions. Since 2017, the US Treasury Department has levied financial sanctions, an export embargo, secondary sanctions and a raft of other measures mostly aimed at choking the South American nation’s oil revenues.
In April, Washington reimposed wide-reaching coercive measures following a six-month waiver that allowed PDVSA to freely export crude. The US requires companies to seek authorization to deal with Venezuela under the threat of secondary sanctions. It is not presently known whether Atlas Oranto sought or secured a green light from the Treasury Department.
The Maduro government has especially touted investment opportunities in its largely unexplored natural gas reserves. Whereas in joint oil ventures, Venezuelan legislation requires that PDVSA hold a majority stake, a loophole removes that condition for gaseous hydrocarbon projects, effectively meaning that private enterprises can hold the entirety of shares.
Venezuela recently struck two offshore gas deals with neighboring Trinidad and Tobago.
In December, PDVSA issued a 30-year license for a project to explore the 4 tcf Dragon field, located in Venezuelan waters, jointly owned by Trinidad’s National Gas Company (NGC) and Royal Dutch Shell. The latter owns a 70 percent stake and will run operations.
In July, PDVSA granted a 20-year permit for NGC and BP to explore the 1 tcf Cocuina-Manakin field which stretches between Venezuelan and Trinidadian waters. BP will reportedly hold 80 percent of shares. Port of Spain and Caracas agreed to a 66 to 34 percent split of the reserves.
The projects saw Trinidad, Shell and BP need to secure US Treasury licenses to negotiate with the Maduro administration, with US officials attempting to impose that Venezuela receive no cash in the deals. In both cases, PDVSA does not own stakes, with the Caribbean nation limited to taxes and royalties.
