Chevron expands stake in key Venezuelan oil region with new dealnewsline24

April 14 (UPI) — The government of Venezuela signed an agreement with U.S. oil company Chevron Corp. that will allow it to increase its participation in key projects and expand production in the Orinoco Belt, the country’s main oil-producing region.

Venezuelan authorities confirmed the agreement Monday, and it raises Chevron’s stake in the joint venture Petroindependencia to 49% from 35.8% , giving it greater control over operations in an area where extra-heavy crude is produced.

In addition, the company obtained rights to develop the Ayacucho 8 block, an area near existing operations that could help facilitate increased production.

“This agreement expands Chevron’s position in heavy crude in two key projects in Venezuela,” said Javier La Rosa, president of Chevron Base Assets and Emerging Countries.

As part of the deal, Chevron will transfer to the Venezuelan state its stake in several lower-priority projects, including offshore gas fields and an oil field in the west part of the country. The operation aims to concentrate investment in areas with higher production potential.

Joint ventures between Chevron and state-owned Petróleos de Venezuela produce about 260,000 barrels per day, roughly one-fourth of the national total. The company expects to increase that output by 50% over the next two years.

The agreement was signed after the government approved a reform to the hydrocarbons law that allows greater participation by private and foreign companies in the sector, with the goal of attracting investment and restoring oil production.

During the event at Miraflores Palace, acting President Delcy Rodríguez said the new legal framework offers guarantees for investors and will help boost production, Infobae reported.

“We expect to make significant progress in production,” she said.

Also attending the ceremony were the U.S. chargé d’affaires in Caracas, Laura Dogu, and Deputy Assistant Secretary of Energy Kyle Haustveit, in a sign of renewed cooperation between the two countries in the energy sector.

The agreement is part of a broader process of opening Venezuela’s oil sector. In recent days, other U.S. companies such as ConocoPhillips and ExxonMobil have visited to assess potential investments.

Both companies left the country after the sector’s nationalization in 2007 and have conditioned their return on changes to business rules and greater stability.

Meanwhile, Spanish oil company Repsol is seeking to significantly expand its presence in Venezuela.

According to Venezuelan news outlet Efecto Cocuyo, the company plans to take direct control of its oil operations in the coming days, which would allow it to increase production by more than 50% in the short term and triple it within three years.