Venezuela Inks Five Oil and Gas Agreements with Shell

• The Venezuelan government has signed five contracts with Shell that will give the European supermajor rights to operate the giant Loran natural gas field. The agreements formalise Shell’s participation in Loran, a cross-border reservoir shared with Trinidad & Tobago (T&T) that is estimated to hold 7 trillion cubic feet (tcf) of natural gas, while also covering oilfield expansion and efforts to reduce gas flaring.
• “For the first time, the Hydrocarbons Law, which was recently reformulated and amended, is allowing us these forms of negotiations and flexible business agreements where we will also boost production, and where we can make better use of resources for the people of Venezuela,” said Venezuela’s interim president, Delcy Rodriguez.
• She emphasised the strategic step seeks to enhance the country’s energy capabilities through direct collaboration with key international players, thus ensuring concrete progress in the infrastructure needed for hydrocarbon extraction in the Loran field.
• In 2023, Venezuela and T&T reached a deal with Shell to produce and export gas from the Dragon field, which is estimated to contain 4.2 tcf of gas. Together, the Loran and Dragon projects are expected to help Venezuela launch offshore gas exports, initially through supplies to T&T for processing into LNG. In addition to Loran, Shell also agreed to a technical alliance to support procurement and output expansion at fields in Monagas North, and to a separate pact to buy equipment and parts to reduce gas flaring.
• The agreements move Shell to the top of Venezuelan state-owned energy company PDVSA’s (Petróleos de Venezuela, S.A.’s) list of partners for key oil projects. That said, UK supermajor BP p.l.c is also set to participate in the Loran gas field and in the neighbouring Cocuina-Manakin offshore gas project, according to separate deals with the Venezuelan government.
• Recently, PDVSA and Spanish energy group Repsol also signed a crude and gas agreement to boost output in northwestern Venezuela, which could add about 20,000 barrels per day (bpd) of light crude to the current average output of around 40,000 bpd. The agreement also includes plans to triple output from Venezuelan oil operations within three years.

(Sources: Upstream Online, The Energy Year & Reuters)