Achievements and Opportunities in Venezuela’s Energy Landscape

By Misión Verdad – Jun 14, 2024

The Venezuelan oil industry is immersed in a process of transformation and reactivation, challenged by the illegal sanctions imposed by the United States government. Despite this adverse situation, Petróleos de Venezuela, SA (PDVSA) has launched a series of strategic agreements and intensive efforts to strengthen the sector, showing tangible results in the increase in national production, as confirmed by figures from the Organization of Petroleum Exporting Countries (OPEC).

Below, we explore the crucial moves PDVSA has made in recent weeks that point toward a more prosperous near future for the national Venezuelan energy industry.

PDVSA and Texas oil companies agree to increase production
Oil businesspeople from Texas and PDVSA have signed a memorandum of understanding that establishes the operation of 3,000 wells in the Orinoco Oil Belt over a year and a half.

The agreement, signed on June 11, has been described as a significant milestone by Alejandro Terán, president of the Latin American Association of Oil Businessmen of Texas (ALEP). Terán highlighted the importance of the agreement since it will allow the Texas company, Sunergon Oil, to establish ties with the Venezuelan oil industry and make important operational investments in the over 15,000 wells that are located around the Belt and the East of Venezuela.

The agreement will be carried out in three phases. It will begin with drilling 600 wells in the first stage, followed by another 1,200 wells in the second stage, to end with the goal of 3,000 wells in a year and a half. Terán emphasized that this massive investment in over 15,000 oil wells will allow Venezuela to produce 3,250,000 barrels per day (b/d) in the next three years, a figure that will lead to recovering 80% of its capacity.

Sunergon Oil Operation Group LLC, the Texas company that has established this agreement with PDVSA, already has pre-approval from the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury to execute the operation. Terán highlighted that Sunergon Oil is the first Texan company member of ALEP to contribute to the increase in production in the next six months.

Texas is in a state of crisis, with a deficit of 4 million barrels being covered by importing oil and gasoline. Given the upcoming winter of 2024, the president of ALEP warned about the possibility of a shortage similar to that experienced in 1971, “when US citizens really had a very cold Christmas.” The possibility of repeating such a scenario in the context of presidential elections has led the US government to seek to cover its hydrocarbon quota.

Terán called on US President Joe Biden to begin lifting sanctions imposed on the Venezuelan oil industry with a goal of productivity meeting the needs of markets currently facing a significant deficit due to the decline in US oil production derived from fracking.

Alliances with Türkiye to strengthen petrochemical industry
In a joint effort to strengthen their bilateral cooperation ties, Venezuela and Türkiye have recently signed strategic collaboration agreements in the gas, petrochemical, and mining sectors. This alliance is based on principles of mutual benefit and seeks to promote the economic and technological growth of both countries.

In a speech from Aragua state, Venezuelan President Nicolás Maduro highlighted the importance of these strategic projects, remarking on the efforts to strengthen ties between both countries. “We are seeing the fruits of all our efforts to unite Türkiye and Venezuela. We are sealing strategic projects that will benefit both nations,” said President Maduro.

The signed agreements cover various areas of cooperation and development. Firstly, a strategic alliance has been established for the development of the natural gas value chain with the objective of exporting it. This alliance, signed by the Venezuelan Minister for Petroleum and President of PDVSA Pedro Tellechea and the president of the Yildirim group of companies of Türkiye, Robert Yüksel Yildirim, will make it possible to take advantage of the Turkish experience in this field and promote the export of Venezuelan natural gas.

An investment and productive participation contract has also been signed to develop petrochemical activities in Venezuela. This document, signed by the state-owned Petrochemicals of Venezuela, SA (Pequiven) and the Yildirim group of companies from Türkiye, will lay the foundations for constructing a petrochemical ammonia production plant in collaboration between both countries.

Finally, a concession contract has been established for the exploration and extraction of minerals such as gold and copper and their subsequent commercialization to take advantage of Venezuela’s mining potential and promote investment in this sector.

President Maduro highlighted the importance of this strategic alliance and stressed that new areas of investment will be studied to expand cooperation between Ankara and Caracas in the field of petrochemicals. These agreements are expected to boost technological investment and open new opportunities for PDVSA in future gas markets.

New chapter of energy cooperation with Nigeria
The Venezuelan Oil Minister met on June 10 with Arthur Eze, Atlas Oranto Petroleum’s executive director, a leading Nigerian oil industry company. The meeting, which took place at the MinPetróleo-PDVSA Complex, was attended by the president of the International Center for Productive Investment (CIIP), Álex Saab, and the Venezuelan ambassador to Nigeria, Alberto Castellar.

The objective of the meeting was to explore investment opportunities in the oil and gas sector to strengthen energy cooperation between Venezuela and Nigeria. The advantages and opportunities offered by the Venezuelan oil industry were highlighted, as well as the favorable policies for foreign investment in the energy sector.

The CIIP, as a bridge between investors and those responsible for Venezuelan economic assets, facilitates foreign investment in the country. Eze’s presence and experience in West Africa open possibilities for strategic alliances between both countries.

Tellechea highlighted that “in 2024, international investments in Venezuela will skyrocket,” following the guidelines of President Nicolás Maduro promoting a new economic model. The meeting laid the foundation for a potential energy collaboration that would benefit the countries and drive growth and innovation in the oil industry.

Last February, Ambassador Castellar met with the Nigerian minister of economy and planning, Atiku Bagudu, to analyze the agenda of mutual cooperation in agriculture, energy, and environmental protection. The potential for commercial exchange between both nations was highlighted. The second High-Level Joint Commission, to be held this year in Abuja, will continue the efforts for commercial air connectivity between Venezuela and Nigeria.

PDVSA Will Partner with Texas Oil Company to Restore Venezuela’s Oil Production

Strengthening the José Antonio Anzoátegui oil industrial hub
As part of the Venezuelan national oil industry’s continuing recovery, Tellechea visited the José Antonio Anzoátegui Industrial Hub (CIJAA) in Barcelona, Anzoátegui state.

During his visit, the Minister for Petroleum met with the PDVSA Board of Directors to review and follow up on the company’s strategic plans, focused on strengthening the operational and administrative processes of energy projects.

Together with the senior management of PDVSA, Tellechea recognized the efforts of the workers at the José Antonio Anzoátegui Crude Shipping and Storage Terminal (Taecjaa), the main maritime terminal through which 90% of the crude oil marketed by PDVSA is shipped.

The visit included an inspection of the Taecjaa refurbishing work, carried out in collaboration with the Iranian company Petropars. The pumping capacity was reactivated to 720,000 b/d, thanks to the commissioning of two new pumps, and the restoration of tanks began, which will increase the storage capacity by 700,000 b/d.

This activity focuses on the immediate solution of PDVSA’s operational and administrative problems to strengthen and ensure the long-term recovery of the oil industry, a fundamental pillar of the Venezuelan economy.

(Misión Verdad)

Translation: Orinoco Tribune

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