(WO) – ExxonMobil has signed a memorandum of understanding with Petróleos de Venezuela SA (PDVSA), a first step toward returning to Venezuela nearly two decades after its assets in the country were expropriated. PDVSA President Héctor Obregón and ExxonMobil country executive Andrés Acosta signed the agreement Nov. 9 in Caracas, in a ceremony led by interim President Delcy Rodríguez and attended by ExxonMobil Upstream President Dan Ammann.
According to the Venezuelan government, the agreement follows months of talks and covers both the reactivation of existing fields and exploration for new ones. The non-binding MOU gives ExxonMobil a one-year exclusive period to negotiate contract terms and review subsurface data, Reuters reported. Sources told Reuters the company can evaluate seven areas, including the Petromonagas project, formerly Cerro Negro, in the Orinoco Belt, which ExxonMobil operated before its 2007 expropriation, along with three other Orinoco areas and an exploration block.
ExxonMobil called the MOU a “meaningful first step.” It said any future investment would depend on stable policies, clear regulations and competitive returns. U.S. Energy Secretary Chris Wright called the agreement “tremendous progress in a remarkable short time.”
The deal marks a shift for ExxonMobil. In January, CEO Darren Woods described Venezuela as uninvestable, and the company has since sought safeguards for a possible return. Woods said on the company’s third-quarter earnings call that progress had been made on fiscal and legal terms.
Questions remain over the stakes held by Russian companies in some of the projects. Russia’s Roszarubezhneft holds a 40% interest in Petromonagas. Venezuela’s oil minister, Paula Henao, said the government would respect its agreements with Russia and China.
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