Venezuela plans to issue a license next month to Italy’s Eni SpA and Spain’s Repsol SA to export natural gas, said Pedro Tellechea, the country’s oil minister and head of state-owned Petroleos de Venezuela SA.
On May 5, the country already signed an agreement with the European energy giants that allows it to export liquids – or condensate – of natural gas to other markets. It was the first step in allowing Venezuela to become a natural gas exporting country after more than 100 years of focusing on oil.
“In the next few days we will finish negotiating the LNG export license,” Tellechea said in an interview Friday from PDVSA’s offices in Caracas. “Eni and Repsol are interested in growing in the gas area in Venezuela. They had been waiting for the export permit for natural gas liquids for seven years, which we have just granted”.
The start date of exports “will depend on the speed of the investment they disburse,” he said.
The two European companies want to resume their jointly managed Cardon IV project “at its maximum capacity,” which is 1.3 billion cubic feet, Tellechea said. It currently pumps 580 million cubic feet of natural gas to meet Venezuela’s domestic and industrial demand.
Press contacts for Repsol and Eni did not respond to a request for comment outside regular hours.
Tellechea, a military officer and engineer, was appointed Venezuela’s oil industry minister in March after a wide-ranging anti-corruption investigation into billions in lost revenue and flawed contracts led to the ouster of his predecessor, Tareck El Aissami, a close ally of President Nicolás Maduro.
Previously, Tellechea headed PDVSA’s petrochemical subsidiary. He became president of the parent company in early January, replacing former president Hugo Chávez’s cousin, Asdrubal Chávez.
Meanwhile, the petroleum ministry is also working closely with China National Petroleum Corp officials. in a revamped pipeline that would cut out middlemen and allow them to ship crude directly, Tellechea said. A local CNPC press contact did not respond to a request for comment outside regular hours.
CNPC, a key producer in Venezuela’s Orinoco belt, saw output from its Sinovensa joint venture nearly double to 90,000 barrels a day in early April, according to PDVSA data seen by Bloomberg.
Tellechea’s rise comes as Maduro desperately seeks to increase the nation’s oil revenue, with presidential elections due next year and Maduro likely to run for a third six-year term. The oil industry, which accounts for about 95% of the country’s foreign earnings, has been the victim of titanic mismanagement, falling oil prices, corruption and painful sanctions that prevent any American company from do business with PDVSA without a waiver.
US President Joe Biden has continued the policy, pressing Venezuela’s political factions to negotiate and allowing a pause when signs of goodwill show. At the end of last year, the US granted Chevron Corp. a license to resume oil production in Venezuela after an agreement was negotiated to work on a humanitarian spending plan in Mexico.
Since then, oil exports have soared, hitting a 16-month high of 560,000 barrels per day in April. Still, Maduro has struggled to meet his production target of 1 million barrels, less than half of what Venezuela produced when he took power in 2013.
