Venezuelan Government Secures Natural Gas Agreement with Nigerian Business Entity
Rewritten Article:
August 11, 2024 | Our Site
Venezuela's national oil company PDVSA has sealed two agreements with Nigerian firm Veneoranto to push ahead in the exploration of offshore natural gas reserves. The deals were ink-signed during a ceremony at the Miraflores Presidential Palace on Thursday, in the presence of Venezuelan Oil Minister Pedro Tellechea and Veneoranto representative Arthur Eze.
The agreements, intended to study the "technical-economic feasibility," focus on the Barracuda gas field located in the Gulf of Venezuela and the Boca de Serpiente field situated on the Deltana Platform near the easternmost maritime border. According to Venezuelan authorities, these fields potentially hold a whopping 30 trillion cubic feet (tcf) of natural gas, a discovery that could propel Venezuela to become one of the world's top four natural gas depositors, given the country's current 200 tcf certified reserves.
The deals also provide the foundation for issuing future gas exploration licenses.
President Nicolás Maduro hailed the new investments and reinforced his calls for foreign partners to be an integral part of Venezuela's energy sector. Maduro declared, "Venezuela is ready for mutual respect and fair dealings to sign deals that benefit all parties involved." He emphasized the plethora of opportunities in the oil and gas sectors, particularly in the realm of natural gas, and expressed his eagerness for natural gas exports to Africa.
"We are accelerating our natural gas processes," Maduro said during a TV broadcast.
Tellechea pointed out that foreign investors maintain trust in the country and will serve to aid Venezuela in achieving continued economic growth and stability.
Veneoranto, a subsidiary of Atlas Oranto Petroleum—an African multinational corporation headed in Abuja — recently entered the Venezuelan gas sector. According to Atlas Oranto's LinkedIn profile, the corporation currently operates projects in 11 African countries.
The Venezuelan government has extended invitations to private sector investors to breathe new life into an energy sector heavily targeted by U.S. sanctions. Since 2017, the U.S. Treasury Department has imposed financial sanctions, an export embargo, secondary sanctions, and a myriad of other measures aimed principally at constraining Venezuela's oil revenues.
In a twist of events, in April, Washington reinstated extensive coercive measures following a six-month waiver that temporarily allowed PDVSA to export crude freely. The U.S. now requires companies to apply for permission to deal with Venezuela under the specter of secondary sanctions; it is yet to be determined whether Atlas Oranto sought or obtained a green light from the Treasury Department.
The Maduro administration has been vocal in promoting investment opportunities in its largely untapped natural gas reserves. Unlike joint oil ventures, where Venezuelan legislation demands that PDVSA hold a majority stake, a loophole eliminates the condition when it comes to gaseous hydrocarbon projects, effectively granting private enterprises complete ownership.
Venezuela has 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. Shell owns a 70 percent stake and manages operations.
In July, PDVSA authorized NGC and BP a 20-year permit for exploring the 1 tcf Cocuina-Manakin field that sprawls across Venezuelan and Trinidadian waters. BP is expected to hold 80 percent of the shares, with Port of Spain and Caracas agreeing on a 66 to 34 percent split of the reserves. Trinidad, Shell, and BP had to obtain U.S. Treasury licenses to negotiate with the Maduro administration, with American officials striving to ensure that Venezuela receives no cash in the deals. In both instances, PDVSA does not own stakes, with the Caribbean nation limited to taxes and royalties instead.
- The gaseous reserves found in the Barracuda and Boca de Serpiente fields, if deemed feasible, could potentially boost Venezuela's natural gas reserves to a staggering 33 trillion cubic feet (tcf), making it one of the world's top four natural gas depositors.
- Under the agreements between PDVSA and Veneoranto, the feasibility of exporting natural gas to Africa is being considered, aligning with President Maduro's eagerness for such exports.
- Despite the ongoing U.S. sanctions, foreign investments, such as those from Veneoranto, a subsidiary of Atlas Oranto Petroleum, are seen as crucial for the feasibility of gaseous hydrocarbon projects in Venezuela, aiming to invigorate the country's energy sector.
