Venezuela is opening more of its oil and gas sector to private investment as the country seeks capital to rehabilitate mature fields, rebuild aging infrastructure and ultimately increase crude production toward 3 MMbpd, government and PDVSA officials said Aug. 19.
Speaking at an industry event in Houston, Venezuelan Hydrocarbons Minister Paula Henao said recent regulatory reforms have expanded opportunities for private companies across the hydrocarbon value chain, from upstream development through commercialization and petrochemicals.
“We have just passed a new regulations reform that has given Venezuela opportunities for investment across the entire value chain from upstream to commercialization,” Henao said.
Changes introduced through a January reform and implementing regulations issued in July allow greater private participation in primary hydrocarbon activities through new contractual structures. The framework also gives minority partners in mixed enterprises greater operational responsibilities and introduces international arbitration and economic-equilibrium protections.
Henao said the changes should give Venezuela greater flexibility to market fields to prospective investors and attract capital to its large underdeveloped resource base.
“With a stronger privatization of the sector, we have the opportunity to commercialize and promote our fields to more interested parties,” she said. “This gives us a lot of advantages and maximizes our efficiency.”
Venezuela is producing approximately 1.25 MMbpd and is targeting a longer-term recovery toward 3 MMbpd. Reaching that level would require significant investment in mature-field redevelopment, well rehabilitation, technology, oilfield services and supporting infrastructure.
PDVSA TARGETS INFRASTRUCTURE REHABILITATION
PDVSA Executive Vice President Jovanny Martínez said attracting international investment will also be critical to restoring the country’s aging energy infrastructure, particularly its natural gas network.
“We need to increase the reliability and capacity of that infrastructure,” Martínez said at the Houston event.
PDVSA is seeking new investment and partnership structures as Venezuela moves away from a historically state-dominated operating model and provides a larger role for private companies.
Martínez said Venezuela already has an extensive gas infrastructure base, but additional investment is needed to improve reliability and capacity and support increased production and commercialization.
The investment push extends to upstream redevelopment. New agreements are targeting mature fields, reservoir studies, digital modernization and well rehabilitation across Venezuela’s producing basins.
Venezuela is also pursuing expansion of its natural gas sector, including the offshore Loran development involving bp, ADNOC-backed XRG and UCC. The country is seeking additional opportunities involving non-associated gas and infrastructure that could connect Venezuelan production with regional and international markets.
“The only way for our ambitions to become a reality is for us to promote investments, find association schemes and present opportunities to the world,” Martínez said.