Continental Resources, a privately held oil and natural gas company, on September 16 joined a growing number of U.S. oil companies committing to extract oil from Venezuela, reports The New York Times.
Harold Hamm, an oil executive with close ties to President Donald Trump, signed a preliminary deal with Venezuela’s national oil company, Petróleos de Venezuela (PDVSA), to develop and operate a 126,000-acre region in the country’s oil-rich Orinoco Belt, known as the Ayacucho 2 Block.
In the statement, the oil company said the parties intend to advance a long-term Contrato de Participación Productiva (CPP) agreement in the coming weeks.
“Following the Trump Administration's call for American energy companies to help rebuild Venezuela's oil industry, Continental undertook an independent evaluation of opportunities in the country,” the statement went on. “That evaluation, together with Venezuela's revised hydrocarbon legal framework, provided a path for Continental to pursue this opportunity.”
Trump has been putting pressure on American oil companies to invest in Venezuela since the country’s leader, Nicolás Maduro, was captured in a military raid in January. Many initially expressed reluctance, having lost billions of dollars after the disastrous nationalization and subsequent collapse of the nation’s oil industry under socialist president Hugo Chavez.
Another challenge is that much of Venezuela’s super-heavy crude oil has a tar-like consistency, and most American oil producers lack experience in handling such heavy oil.
On September 1, the Trump administration announced a major oil deal with Venezuela that would purportedly give the United States rights to 65 billion barrels of Venezuelan oil, or 20% of the country’s oil reserves. Libertarian think tank, the Cato Institute, described that deal as "troubling" and "a gift to socialists all over the world who can now point to it with some credibility as an example of an imperial resource grab.
The Times reports that the Continental Resources agreement, which is not part of the deal that the Trump administration announced last month, was revealed at a meeting of energy ministers from the Group of 20 nations hosted by the U.S. government in Houston.
Chevron, a much bigger U.S. oil company that was the only U.S. player still operating in Venezuela, announced on September 2, that it would more than double its production in the country over the next five years.
