Maurel & Prom Signs Pact to Expand Venezuela Oil, Gas Development

(Reuters) — Venezuelan state oil firm PDVSA and French energy company Maurel & Prom have signed an agreement aimed at expanding operations and increasing crude and gas output at their joint venture in Venezuela's western region, the companies said.

The firms had negotiated the terms of the agreement, which focuses on areas of Venezuela's oldest production region, Lake Maracaibo, before the U.S. in October eased sanctions on the South American country.

The U.S. action is helping accelerate some pacts in negotiation between PDVSA and its foreign joint venture partners as it allows Venezuela to freely export oil, gas, and fuel, receive payments and attract investors for a six-month period.

PDVSA CEO Pedro Tellechea, who is also Venezuela's oil minister, made the announcement on social media on Tuesday.

Maurel & Prom on Wednesday said it plans to reinvest to preserve its Venezuelan assets, whose production has declined since oil sanctions were first imposed on Venezuela in 2019.

It also said it will focus on recovering $914 million in outstanding debt owed to its M&P Iberoamerica unit by allocating a portion of its Venezuela joint venture's revenue.

Maurel & Prom in 2018 bought a minority stake previously owned by Shell in Venezuela's Urdaneta Oeste field at Lake Maracaibo. The new agreement will expand activity beyond the area originally assigned to the joint venture, the French company said.

The joint venture aims to produce an average of some 64,000 barrels of oil and gas per day (boepd) through 2041. Current gross output potential is 16,500 boepd, which would increase to 25,000 boepd by the end of 2024.

The French company told Reuters in early October it had requested an authorization from the U.S. government to move forward with a pact with PDVSA. 

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