Chevron and Shell preparing first deals in Venezuela since Maduro's ouster - Reuters

International oil giants Chevron and Shell will soon sign major oil contracts with Venezuela, Reuters writes, citing sources. These will be the first deals since the United States detained President Nicolas Maduro of the South American country in January.

The new agreements will allow companies to increase production in promising oil regions of Venezuela, emphasizes Reuters, and begin to implement the plan of U.S. President Donald Trump, who called on businesses to invest at least $100 billion of their own funds in the destroyed infrastructure of Venezuela. The White House promised to guarantee the safety of investments, thus hoping to restore the energy industry in the country with the world's largest proven oil reserves.

Chevron has reached an agreement with Venezuela to expand its largest project Petropiar in the Orinoco belt, interlocutors told Reuters. By gaining access to the rich new Ayacucho-8 field, the company will be able to dramatically increase production of extra-heavy oil. Chevron is now seeking tax incentives and low royalty rates for the area. If successful, the company will become the largest private oil producer in the country's main oil region.

Shell in turn signed preliminary oil and gas agreements during a visit by U.S. Interior Secretary Doug Burgam to Caracas last week, the agency's sources said. According to their information, the company plans to develop the Carito and Pirital fields in Monagas state, which are prized for light and medium-heavy oil. This feedstock is needed by Shell to blend with heavy Venezuelan oil to facilitate its exports. In addition, the company intends to develop infrastructure to collect associated gas. Previously, it was just wasted by burning it directly at the fields, but now the company will process it and sell it, Reuters points out.

In late January, Venezuela's National Assembly approved a radical reform of the country's main oil law, the agency writes. It now grants foreign companies autonomy in matters of exploitation, export and sale, even if they are minority partners of state-owned Petróleos de Venezuela (PDVSA).

According to PDVSA, the Petropiar project, a joint venture with Chevron, produced about 90,000 bpd of improved Hamaca oil in February. Total production in Venezuela is about 1.05 mln bpd.

In February, the Venezuelan government began a review of all oil and gas contracts. Officials warned that contracts for inactive projects or those where investment targets were not met could be canceled, Reuters notes.

Shares of Shell in London added 0.5% on March 11, shares of Chevron almost unchanged at the premarket in New York. At the same time, since the beginning of the year quotations of both have grown sharply: the capitalization of Shell increased by almost 16%, Chevron - by more than 24%. Investors bought securities of oil giants, including on expectations of escalation in Iran, while in the course of the military operation itself they rose in price insignificantly.

This article was AI-translated and verified by a human editor