(WO) — The U.S. government has reached an agreement tied to the development of 17 oil fields in Venezuela containing approximately 65 Bbbl of proven reserves, according to a White House fact sheet released Aug. 31.
Under the agreement, Venezuelan interim authorities granted North American Blue Energy Partners (NABEP) 100-year concessions covering the 17 fields. The privately held company plans to invest up to $100 billion in Venezuelan oil infrastructure to increase production from the assets.
As part of the arrangement, NABEP granted the U.S. Department of War’s Office of Strategic Capital a 35% equity stake in its corporate parent. The U.S. government will also have certain governance rights, including veto authority over appointments to the company’s board of directors.
The U.S. Department of State will have the right to purchase 20% of production from NABEP’s current and future operated fields at production cost, according to the White House. The department will also hold a right of first refusal on the remaining 80% of production.
The administration said the offtake arrangement could provide crude for the U.S. Strategic Petroleum Reserve and other government requirements. It also expects some additional Venezuelan production to be processed at U.S. refineries.
NABEP’s concessions fall under Venezuela’s recently adopted hydrocarbons framework. The company expects its planned investment program to support the redevelopment of fields that are currently either inactive or producing below capacity.
The White House said NABEP could pay an estimated $200 billion in royalties and taxes to Venezuela over the first 25 years as production increases. That figure is a projection and will depend on the pace and scale of future development and production.
The agreement comes as U.S. companies increase their involvement in Venezuela’s oil sector. Chevron, currently the only U.S. oil major operating in the country, is separately nearing an agreement for operating rights to two large oil fields in the Orinoco Belt, Bloomberg reported Sept. 1.
The NABEP agreement also follows broader changes to Venezuela’s oil sector aimed at attracting private investment and increasing production after years of underinvestment.
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