Chevron, Eni commit to expand oil projects in Venezuela under US eye

By Timothy Gardner and Vivian Sequera

CARACAS, Sept 2 (Reuters) - ‌Several international energy firms, including ​Eni, GE Vernova ​and Chevron committed on Wednesday to project expansions to boost oil output in Venezuela, in a signing ceremony in Caracas overseen by interim President Delcy Rodriguez and U.S. Energy Secretary Chris Wright.

The deals are separate from a Caracas-Washington deal recently unveiled that gives ‌the U.S. access to 17 oilfields. Most of the pacts announced on Wednesday relate to project expansions that have ⁠been in negotiation with Venezuela's Oil Ministry and state oil company PDVSA as part of the migration of dozens of energy contracts to new terms under a sweeping oil reform approved ‌in January.

Still, the signings represent the latest ‌effort by private companies with a longstanding presence in Venezuela to help the country revive its struggling oil industry, which produces about 1.25 million barrels per day, far short of its 3 million bpd peak in the late 1990s.

Most oil majors have eschewed major investment in the country for ​years, retreating after a 2007 nationalization. The industry has also faltered due to lack of investment, mismanagement and sanctions imposed by the U.S., which is now spearheading a $100 billion investment plan that officials say will double Venezuela's output in the coming years.

"We are trying to work at what I ⁠call Trump-speed. President (Donald) Trump didn't want a nudge or a slow drift in a positive direction. He wanted to see as fast as possible transformation in Venezuela," Wright said.

GE Vernova signed a power ​sector alliance, which Rodriguez singled out due to Venezuela's electricity deficit that has left households without power for hours and hobbled industries.

Venezuelan businessman Alejandro Betancourt was not seen at the ceremony, days after his company NABEP signed ​the separate deal with Washington to gain access to a fifth of Venezuela's oil ‌reserves.

Wright and Rodriguez defended the choice of the NABEP partnership to reporters on Wednesday.

"NABEP is the second-largest producer (in the country), it is a company with scale, technology, a proven track record and is Venezuelan," Wright said, adding that the ⁠U.S. will have strict control over the flow of funds.

BULKY INVESTMENTS

Eni, which shares an offshore gas project with Repsol and a shallow water oil project with PDVSA, will expand to the large Junin 5 heavy oil area in the Orinoco Belt, where it plans to invest $1.5 billion, industry sources said.

As part of its deal, Eni's current joint venture ⁠with PDVSA will transition into a 25-year production-sharing contract, the company said in a release.

"What we need is not just signing papers, we need barrels," Eni CEO Claudio Descalzi ​said during the event.

Junin 5 produces approximately 12,000 bpd, Eni said in the release. The oil production target from all its oil projects is 400,000 bpd by the end of this decade.

Other pacts include an oilfield development agreement with energy firm Primavera and an exploration agreement with Denver-based oil services company Aspect Holdings.

Aspect will develop several fields over ‌the coming years in Venezuela, Chairman Alex Cranberg said during the signing ceremony.

Chevron plans to invest more than $7 billion to double its output in the country to about 600,000 bpd over the next five years, part of its strategy of ‌expanding joint ventures with PDVSA.

Chevron CEO Mike Wirth and Descalzi traveled to Venezuela for the signing. It was Wirth's first visit to the South American country, where Chevron has maintained a consistent ⁠presence even after other oil majors left following the ‌seizure of assets under former President Hugo Chavez.

The ​U.S. and Venezuela are also working to lift sanctions on Venezuela, Rodriguez said during the press conference.

(Reporting by Vivian Sequera, Deisy Buitrago, Marianna Parraga, Tim Gardner, Sheila Dang, Francesca Landini and Julia Symmes Cobb; Editing by Aida Pelaez, David Gaffen, Nathan ‌Crooks, Rod Nickel)

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