Venezuela Signs Deal with France’s Maurel & Prom Amid Efforts to Increase Oil Production

Top oil traders and drillers have begun to reengage with Venezuela’s oil industry to increase output in joint ventures abandoned due to US sanctions.
Oil Minister Pedro Tellechea met with Maurel & Prom representatives to detail renewed operations in western Venezuela. (X: @TellecheaRuiz)

Caracas, November 16, 2023 ( – Venezuelan oil authorities have been speeding negotiations with new and old partners to expand crude production and increase revenue in the six-month sanctions relaxation period announced by the US government.

According to OPEC’s secondary sources, Venezuela’s output declined to 751,000 barrels per day (bpd) in October from 758,000 in September. For its part, state oil company PDVSA reported a higher figure of 786,000 bpd, up from the prior month’s 762,000 bpd. The numbers are still far from this year’s target of 1 million bpd.

Crude and fuel exports also decreased to 666,290 bpd, 19 percent below the 821,500 bpd shipped in September while oil byproducts and petrochemicals fell from 324,000 to 228,500 metric tons. The drop was caused by a lack of diluents used to produce exportable crude grades and by power interruptions shutting down crude upgraders.

Recently, PDVSA signed spot sales contracts with at least three customers using a pre-payment clause, but oil quality issues have reportedly delayed shipments.

Since 2017, Washington has imposed financial sanctions and an export embargo against PDVSA while levying secondary sanctions and threats against foreign oil companies and actors dealing with Venezuela. As a result, oil production fell to historic lows as facilities heavily deteriorated due to a lack of maintenance, graft, and a brain drain.

Following an electoral accord between the Nicolás Maduro government and the US-backed opposition signed on October 18, the US Treasury Department issued time-limited licenses allowing production, investment and sale in the Venezuelan oil and gas sectors. Since then, Venezuelan oil authorities have prioritized hiring services and equipment to reactivate wells and rigs, which would expand production capabilities, while looking to export long-stored crude.

According to a July presentation by Venezuelan Oil Minister and PDVSA president Pedro Tellechea, the company is looking to revive 27,966 wells, mostly located in Venezuela’s western region, with the stated goal of reaching 1.7 million bpd by the end of 2024.

On November 2, Swedish oil firm Maha Energy gained rights to a minority stake in the PetroUrdaneta joint venture which operates three onshore fields in the Maracaibo basin, Zulia state. Maha purchased a stake from Novonor Latinvest, a subsidiary of Brazilian conglomerate Novonor (formerly Odebrecht), which held a 40 percent participation in the enterprise, with PDVSA holding the remaining 60 percent of shares. 

The Stockholm-based company’s chief executive officer, Kjetil Solbraekke, told Bloomberg that the firm will focus on quickly ramping up dormant wells through low-cost interventions in order to increase crude production from the current 1,000 bpd to between 20,000-40,000 bpd in two to three years.

Furthermore, on November 8 Tellechea signed a deal with French energy company Maurel & Prom to produce some 50,000-64,000 of crude and natural gas barrels per day (boepd) at the Petroregional del Lago joint venture, in the Urdaneta field at Lake Maracaibo. The project’s current output stands at around 16,500 boepd.

Reuters reported that the French driller requested an authorization from the US government to negotiate with PDVSA prior to the October sanctions relief announcement. The agreement is allegedly similar to the one PDVSA and US oil giant Chevron signed last year. 

The deal includes allocating a portion of its Venezuela joint venture’s revenue to recover US $914 million in outstanding debt owed by Caracas. The Paris-based company is likewise a participant in the $1.5 billion plan to capture methane emissions.

“After five years, we are returning to this joint venture and it is an extraordinary step,” said President of Maurel & Prom Iberoamerica, Olivier de Langavant, during a ceremony in Caracas. For his part, Tellechea said the agreement will lead to “very important development” in Lake Maracaibo. 

The PDVSA president added that a gas flaring project in the north of Monagas state was “almost ready” to be operated with Maurel & Prom, Spain’s Repsol and Italy’s Eni. The latter two received exemptions from the US Treasury Department in May 2022 to recoup accumulated debt and dividends from their joint ventures in the Caribbean country.

In recent months, PDVSA and Eni have additionally been producing and storing about 2,000 bpd of Corocoro crude grade at a floating storage and offloading facility in the Gulf of Paria, where operations remained frozen since 2019 following US sanctions.

Venezuela is reportedly offering to sell up to 1 million barrels of Corocoro crude through an intermediary to an Asian buyer, which could become the first sale of that grade since 2021.

Following the US sanctions relief measures, more companies are seeking to revive oil trade with their Caribbean partner. In early November, PetroChina offered to buy 265,000 barrels per day (up to 8 million barrels a month) of Venezuelan crude. The payments would be in yuan in accordance to the countries’ de-dollarization route.

Currently, China is the main destination of Venezuelan crude shipments with an average of 430,000 bpd exported this year as part of Caracas-Beijing bilateral agreements and debt repayment deals. PDVSA has yet to accept PetroChina’s proposal stating difficulties to comply with a 265,000 bpd commitment.

Another important company set to return to the Caribbean nation is large independent oil trader Vitol Group, which has reportedly hired 2-million-barrel supertanker Gustavia S to load from Venezuela this month or in early December with PDVSA’s approval.

Other independent oil trading companies have also stated interest to carry Venezuelan cargoes, among them is Gunvor Group which has offered its services to US refiners.

Edited by Ricardo Vaz in Caracas.