By Agency Staff
The US is in talks with Chevron, other crude producers and major oilfield service providers about a plan to quickly raise Venezuela’s crude production, Bloomberg News reported on Saturday, citing senior administration officials.
Officials have discussed deploying SLB, Halliburton and Baker Hughes to repair and replace outdated equipment, and refresh older drilling sites, the report said. Reuters could not immediately verify the report.
With limited investment, Venezuela could boost production by several hundred thousand barrels over the short term, the report said, adding that modern US equipment and techniques could revitalise existing wells and bring new production online within months.
US President Donald Trump said on Friday that US oil companies will soon start drilling for oil in Venezuela. He has been clear about his desire to boost oil production after the capture of the country’s leader, Nicolas Maduro.
SLB, the world’s top oilfield services provider, said on Friday it can rapidly increase its activities in Venezuela, provided the appropriate licensing, safety parameters and compliance measures are in place.
It was among the oil companies that met with White House officials to discuss potential investment in Venezuela.
“We are already receiving a lot of inquiries from our customers,” SLB CEO Olivier Le Peuch said during a conference call after it posted fourth-quarter earnings. “I would have to preface this with the right conditions, including licensing, including payments and operating license will have to be put in place,” Le Peuch said.
SLB is the only international service company actively operating in Venezuela, delivering services for Chevron under the oil major’s licence. Chevron is the only US oil major producing crude in the South American country, with about 240,000 barrels per day in joint ventures with Venezuelan state-run oil company PDVSA.
SLB reported a bigger-than-expected fourth-quarter profit and said it had maintained active facilities, equipment and local personnel on the ground in Venezuela. The company said it had more than $1bn in peak annual revenue from Venezuela about a decade ago and more than 3,000 people employed in the country. It now has about 80 Venezuelans working there,and more than 1,000 Venezuelans are employed by SLB overall.
Rival oilfield service provider Halliburton, which also met with White House officials, said it would seek to re-enter Venezuela as soon as commercial and legal terms, including payment certainty, were resolved. Halliburton said it was working through the mechanics of licences that it said were certain to fall in place.
Halliburton said it could move equipment quickly into Venezuela and that it would be fairly straightforward to become operational.
Stifel analyst Stephen Gengaro has said SLB and Halliburton are among the best positioned companies to benefit from any new investment that flows into Venezuela.
A proposed reform of Venezuela’s hydrocarbons law would allow foreign and local companies to operate oilfields on their own through a new contract model, commercialise output and receive sale proceeds even if acting as minority partners of PDVSA, drafts seen by Reuters showed.
Meanwhile, the US has taken the oil that was on seized Venezuelan tankers and will process it in US refineries, Trump said in a New York Post interview that was published on Saturday. “Let’s put it this way — they don’t have any oil. We take the oil,” Trump said.
The oil is being refined in “various places” including Houston, he said.
The US military has seized seven Venezuela-linked tankers since the start of Trump’s month-long campaign to control Venezuela’s oil flows.
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