CARACAS, Sept 2 - U.S. producer Chevron and Italy's ENI on Wednesday signed significant agreements with Venezuela focused on enlarging oil projects that government officials and company executives said are intended to help raise the OPEC member's production.
Venezuelan authorities and the companies involved stressed that these agreements are separate from the contentious Caracas-Washington arrangement that grants the United States access to 17 large oilfields. Rather, the majority of the newly signed pacts concern project expansions that have been subject to negotiations between the country's oil ministry and state oil company PDVSA.
Those negotiations form part of a broader migration of numerous energy contracts to updated terms under an extensive oil reform that was approved in January. Officials and executives described the recent signings as a further step by private companies with long-standing operations in Venezuela to participate in efforts to revive an oil sector that has declined sharply from past levels.
Venezuela's oil production currently stands at roughly 1.25 million barrels per day (bpd), a figure well below the nation's peak output of about 3 million bpd reached in the late 1990s. At the Miraflores presidential palace event, ENI Chief Executive Claudio Descalzi underscored the difference between agreements on paper and actual output:
"What we need is not just signing papers, we need barrels," Descalzi said.
Company leaders and officials noted longstanding challenges in the sector. Most international oil majors have avoided large-scale new investments in Venezuela for years, pulling back following the 2007 nationalization. The industry has also suffered from underinvestment, mismanagement and U.S. sanctions, factors cited by participants as contributing to the decline in production.
U.S. sanctions notwithstanding, officials say Washington is now leading a $100 billion investment plan that they contend will double output in the coming years. Chevron Chief Executive Mike Wirth said his company is committed not only to the projects just agreed, but to building on a century of progress in the country. Chevron has maintained a continued presence in Venezuela even as other majors left after assets were seized under former President Hugo Chavez.
In addition to Chevron and ENI, other firms that signed agreements on Wednesday include power company GE Vernova, energy company Primavera, and Denver-based oil services firm Aspect.
Context note: The agreements announced relate to project expansions and contract migrations under the January oil reform; they are not described as part of the Caracas-Washington deal granting U.S. access to 17 large oilfields.