Italy’s Eni Plans Major Increase in Venezuela Oil Production
(Bloomberg) --
Italian energy producer Eni SpA aims to eventually boost production from its Venezuelan operations to more than 1 million barrels a day, a figure that includes volumes from state-owned Petróleos de Venezuela SA, according to people familiar with the matter, a potentially significant boost to US President Donald Trump’s effort to revive the country’s battered crude industry.
As part of that push, Eni is set to announce an agreement with PDVSA on Wednesday to develop the giant Junín 5 heavy-oil field in Venezuela’s Orinoco Belt, one of the people said. Eni has held an interest in the field since 2010, alongside PDVSA. Under the new agreement, Eni will become the exclusive operator of the area, taking responsibility for the project’s technical, financial and commercial management, according to the person.
Junín 5 is expected to reach production of about 400,000 barrels a day by the end of the decade, with investment of around $1.5 billion a year, the person added. The field contains about 35 billion barrels of certified oil.
An Eni spokesperson confirmed that an agreement regarding Venezuela will be announced Wednesday, but declined to provide details.
The plans would mark a significant expansion for Eni in Venezuela. The company averaged equity hydrocarbon production of about 64,000 barrels of oil equivalent a day in the country last year.
The announcement comes as the White House prepares to unveil a flurry of deals designed to demonstrate that private companies are responding to Trump’s call to help ramp up Venezuelan crude production following the capture of former President Nicolás Maduro.
The project is located onshore in the Orinoco Belt and is considered one of the region’s major heavy-oil resources.
The company previously said it was working with Venezuelan authorities to help revive the country’s energy sector, but declined to provide details. Eni is expanding its own presence in the South American nation, where it has been negotiating new contracts for the Junín-5 and Corocoro oil projects. It also recently signed a gas-export agreement for the giant Perla field.
US Energy Secretary Chris Wright, who arrived in Caracas on Tuesday, told reporters that companies are on the cusp of signing a series of deals that will put Venezuela on pace to rapidly expand its output of crude.
Wright, who is scheduled to meet with acting Venezuelan President Delcy Rodríguez during his visit, is expected to announce more than a dozen agreements with energy companies on Wednesday. The largest is with Chevron Corp., which is significantly expanding its Venezuela operations with two giant oil fields in the Orinoco Belt.
“Several deals will be announced,” Wright told reporters after arriving in Caracas on Tuesday night. “Those deals will lead to a more than doubling of Venezuelan oil production in the next few years.”
Shell Plc, BP Plc and Spain’s Repsol SA are also expected to sign agreements, Rodríguez said earlier this week on Venezuelan state television.
The moves come as Trump’s Republican Party is under pressure to lower US gasoline prices, which have soared more than 40% this year due to the Iran war, as the November midterm elections loom.
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