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A Bloomberg report on August 19 revealed that Venezuela has signed oil-related agreements with SLB NV (NYSE:SLB) and Hunt Oil as part of its efforts to attract investment and boost its crude production.
One of the contracts is tied to the development and production enhancement of two oil fields, while the other is a framework agreement with SLB for services related to integrated reservoir studies throughout the country.
The oilfield services giant expects to reactivate up to 15 oil rigs that are currently in the South American country.
The deal follows an earlier long-term agreement that SLB signed with Venezuela's state oil company PDVSA to help modernize and revive the country's oil and gas sector.
The MoU covered cooperation across exploration, field development, and production.
The developments follow President Trump's call for global oil companies to invest in Venezuela and help rebuild and modernize its aging oil infrastructure.
The OPEC member holds the largest proven crude oil reserves in the world, accounting for roughly 17% of the global total.
However, its government nationalized several major heavy oil projects in 2007, leaving foreign operators with minority stakes in some ventures while outright seizing their assets in others.
SLB, formerly Schlumberger, also had to significantly scale back its operations, cut staff, and suspend certain services in Venezuela due to unpaid debts amid a deep recession in 2016.
However, the company maintained a local presence in the country, delivering services for Chevron under the oil major's license.
Venezuela is sitting on enormous oil reserves, and the country's push to boost its production from the current 1.25 million barrels per day to 3 million bpd represents a major opportunity for oilfield services firms like SLB.
The oilfield services major is particularly well-positioned to benefit, given its longstanding presence in Venezuela and deep understanding of the country's operating environment and reservoirs.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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