ADNOC’s international energy investment company XRG has entered Venezuela’s natural gas sector through an interest in the offshore Loran gas project, expanding its growing international gas and LNG portfolio.
XRG is joining bp and Qatar-based UCC in the development of the second phase of Venezuela’s offshore Loran gas field.
The project gives the three companies access to more than 4 trillion cubic feet (Tcf) of proven natural gas resources.
The Loran development is part of a much larger offshore gas accumulation that extends across the maritime boundary between Venezuela and Trinidad and Tobago.
Under the agreement, XRG, bp and UCC will hold equal interests in the Loran Phase 2 licence, with bp serving as operator.
The transaction represents XRG’s entry into Venezuela and is another step in the company’s strategy of building an international natural gas and LNG business.
XRG has been expanding its gas portfolio internationally as it seeks to establish positions in major gas-producing regions and connect resources with growing LNG markets.
Loran and the Manatee connection
A major attraction of the Loran development is its connection to the Manatee gas field in Trinidad and Tobago.
Loran and Manatee form part of a broader cross-border gas accumulation that contains approximately 10 Tcf of recoverable gas resources.
The Manatee field is operated by Shell and is already being developed on the Trinidad and Tobago side of the border.
First gas from Manatee is expected in 2027.
The development of the Venezuelan Loran resources alongside Manatee could eventually create a larger regional gas supply system, with Venezuelan gas potentially moving into Trinidad and Tobago for processing and LNG production.
Trinidad and Tobago already has significant LNG infrastructure, making the country an important potential route for Venezuelan natural gas to reach international markets.
Shell developing Loran Phase 1
XRG’s investment follows an earlier agreement involving Shell.
In June, Venezuela awarded Shell a licence covering the first phase of the Loran development.
Shell’s phase is expected to be developed alongside the second phase involving bp, XRG and UCC.
The two developments together are expected to unlock a significant portion of the gas resources located in the offshore area.
The wider Loran-Manatee system therefore has the potential to become an important new source of natural gas for the Caribbean and international LNG markets.
A potential LNG pathway
One of the most significant aspects of the project is its potential connection to existing LNG infrastructure in Trinidad and Tobago.
Rather than developing a completely new LNG export system from scratch, Venezuelan gas could potentially be transported to Trinidad, where it could be processed and ultimately converted into LNG for export.
This would provide Venezuela with a potential route into international gas markets while also supplying feed gas to Trinidad and Tobago’s existing LNG infrastructure.
Trinidad and Tobago has faced challenges in recent years because of declining domestic gas availability and shortages of feed gas for its LNG facilities.
Additional Venezuelan supply could therefore help support the country’s gas-processing and LNG-export industries.
The Loran-Manatee development could consequently create a regional gas corridor linking Venezuelan offshore resources, Trinidad and Tobago’s gas infrastructure and international LNG markets.
XRG expands its Latin American gas strategy
The Venezuelan investment forms part of XRG’s broader push into Latin America.
The company has been building an international gas portfolio designed to capture long-term growth in natural gas and LNG demand.
XRG has also been involved in major gas and LNG opportunities elsewhere in the region.
Its Venezuelan entry comes shortly after the company became involved in the development of Argentina LNG, a major project intended to use Argentina’s Vaca Muerta shale gas resources for LNG exports.
Argentina LNG is backed by YPF, Eni and XRG and is expected to require approximately US$51 billion of investment.
The Venezuelan project therefore gives XRG another potentially significant gas resource base in Latin America.
Venezuela seeks to rebuild its energy sector
The Loran agreement comes as Venezuela attempts to attract international investment into its oil and gas industry.
Venezuela possesses some of the world’s largest hydrocarbon resources, but years of underinvestment, sanctions and political instability have significantly constrained production and development.
The country’s new leadership has been seeking to bring international oil and gas companies back into the sector and encourage investment in projects that can increase production and generate export revenues.
Offshore natural gas has emerged as one of the more attractive areas for international investors because of the size of the resources and the possibility of connecting new production with established regional infrastructure.
The Loran project is consequently being viewed as part of a broader effort to revive Venezuela’s energy industry.
BP to operate Loran Phase 2
Under the new arrangement, bp will operate the second phase of Loran, with XRG and UCC holding equal working interests alongside the British energy company.
The project provides bp with access to a potentially significant offshore gas resource while giving XRG a new foothold in Venezuela’s natural gas industry.
The companies will work on developing the resources with the objective of eventually bringing the gas into production.
The agreement also expands bp’s cooperation with Venezuela.
In April, bp and Venezuela signed a memorandum of understanding establishing a framework for cooperation on exploration and development opportunities in the Plataforma Deltana offshore area, which includes the Loran field.
Additional exploration opportunities
Alongside the Loran Phase 2 agreement, bp and Venezuelan authorities also signed a separate memorandum of understanding covering potential exploration opportunities in the Carupano East block.
The block is located within the Mariscal Sucre maritime area off Venezuela’s northeastern coast.
The agreement could provide another opportunity for international companies to participate in Venezuela’s offshore gas exploration.
It also demonstrates that the Loran development could be the beginning of broader international participation in Venezuela’s offshore natural gas sector.
Strategic importance for regional energy markets
The development has significance beyond the individual companies involved.
If successfully developed, the Loran and Manatee resources could help create a new regional natural gas supply chain connecting Venezuela with Trinidad and Tobago.
For Venezuela, the project offers a potential route for monetising offshore gas resources and generating additional energy revenues.
For Trinidad and Tobago, Venezuelan gas could provide additional feedstock for its existing gas-processing and LNG infrastructure.
For international companies such as bp, XRG and UCC, the project provides access to a large offshore gas resource with a potential pathway to international LNG markets.
The project therefore combines upstream gas development with existing regional LNG infrastructure, making it strategically attractive to the companies involved.
XRG’s view
XRG has described Venezuela as having significant natural gas resources and the potential to play a larger role in meeting regional and international energy demand.
The company sees the Loran investment as consistent with its strategy of developing major gas resources and connecting them with markets where LNG demand is expected to continue growing.
The project also strengthens XRG’s position in the Atlantic Basin and Latin American gas markets.
What the deal means
The Loran agreement represents several important developments at the same time:
XRG enters Venezuela’s energy sector for the first time.
XRG partners with bp and UCC on Loran Phase 2.
The licence covers more than 4 Tcf of proven gas resources.
The project forms part of the wider Loran-Manatee gas accumulation, estimated at around 10 Tcf of recoverable resources.
bp will operate Loran Phase 2.
Shell is developing Loran Phase 1.
Manatee in Trinidad and Tobago is being developed by Shell, with first gas expected in 2027.
Venezuelan gas could eventually be connected to Trinidad and Tobago’s LNG infrastructure.
XRG is expanding its international natural gas and LNG portfolio across Latin America.
bp is also assessing additional exploration opportunities in Venezuela’s Carupano East block.
The Loran development therefore represents more than a single offshore gas investment. It could become part of a broader regional gas system linking Venezuela’s offshore resources with Trinidad and Tobago’s established LNG infrastructure and international markets.
For XRG, the investment strengthens its position as an international gas and LNG player. For Venezuela, it represents another major step in attracting international energy companies and developing its offshore gas resources.