ExxonMobil Evaluates Seven Areas in Venezuela for Potential Energy Projects

ExxonMobil is assessing seven areas in Venezuela for potential oil and gas development under a preliminary agreement with the government and state-owned oil company Petróleos de Venezuela (PDVSA), according to people familiar with the matter.

ExxonMobil is assessing potential oil and gas development opportunities in Venezuela under a preliminary agreement with the government and state oil company PDVSA. [Photo: ExxonMobil Facebook]

The areas include undeveloped fields, mature oil-producing assets and an exploration block, four sources told Reuters reporters Sheila Dang, Marianna Parraga and Deisy Buitrago in a recent report.

Exxon and PDVSA have signed a memorandum of understanding in Caracas in the presence of interim Venezuelan President Delcy Rodríguez.

Under the non-binding agreement, Exxon has exclusive rights for one year to negotiate contractual terms and examine geological and other information related to the areas under consideration, one of the sources said.

The arrangement could give Exxon an opportunity to re-enter Venezuela's energy sector after its assets were expropriated by the government in 2007.

Discussions have focused largely on several heavy-oil blocks in the Orinoco Belt, Venezuela's largest oil-producing region.

These include an area where Exxon previously operated. One potential opportunity is Petromonagas, formerly known as Cerro Negro, where an existing upgrader can process extra-heavy crude into grades suitable for export.

Exxon's possible return could also create operational synergies with its major activities in neighboring Guyana and Trinidad and Tobago.

The company leads the consortium developing Guyana's prolific Stabroek oil block and holds rights to a large deepwater exploration area in Trinidad and Tobago.

Exxon said the memorandum was a "meaningful first step."

The company did not disclose the seven areas or provide a timetable for any final investment decision.

The preliminary arrangement follows Venezuela's efforts to attract foreign investment into its oil and gas industry through changes to its energy-sector framework.

However, the agreement does not guarantee that Exxon will ultimately develop the areas. Any substantial investment would depend on final contractual arrangements, regulatory clarity, stable policies and adequate protections for investors.