(WO) — Continental Resources has signed a memorandum of understanding (MOU) with Venezuela’s state-owned PDVSA to operate and develop the Ayacucho 2 block in the Orinoco Oil Belt, marking the U.S. independent’s entry into Venezuela.
The 126,000-acre block in Anzoátegui state is estimated by Continental to contain approximately 30 billion barrels of oil resource in place. Continental would operate Ayacucho 2 with a 100% working interest upon execution of a definitive Contrato de Participación Productiva (CPP).
Continental and PDVSA intend to advance the long-term CPP agreement in the coming weeks. The MOU therefore represents an initial agreement rather than a final development contract.
“Ayacucho 2 is an extraordinary addition to our portfolio and will contribute significantly to Continental’s growth trajectory,” said Doug Lawler, president and CEO of Continental Resources.
Continental said it began evaluating opportunities in Venezuela following calls from the Trump administration for U.S. energy companies to participate in redevelopment of the country’s oil industry and subsequent changes to Venezuela’s hydrocarbon framework.
The agreement comes amid a broader expansion of foreign investment in Venezuela’s oil sector. U.S. Energy Secretary Chris Wright said Wednesday that a U.S. producer was preparing to announce a major Venezuela investment, while foreign producers have been entering or restructuring development agreements under the country’s revised energy framework.
Continental said the proposed development would bring private capital, technology and operating expertise to Ayacucho 2. The company is also evaluating additional opportunities in Venezuela as it expands an international portfolio that includes Argentina’s Vaca Muerta shale formation.
The Venezuela expansion would add to Continental’s core U.S. operations and represents what the company described as one of the largest resource opportunities in its nearly 60-year history.
See also: Venezuela joins G20 energy summit in Houston as U.S. seeks more oil deals
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