Petroleos de Venezuela (PDVSA), founded in 1976, is the Venezuelan state-owned oil and natural gas company. Credit: testing via Shutterstock.

Venezuela will sign natural gas production and export licences with companies by the end of 2023, according to a government minister.

Venezuela’s Oil Minister, Pedro Tellechea, is also the president of Venezuela’s state energy company Petroleos de Venezuela (PDVSA). Tellechea said the country “must” become a gas exporter and that it is taking the “first steps” to do so.

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While Venezuela produces and exports oil, mostly to China, it has a huge capacity of underdeveloped gas resources because of US sanctions and the resultant inability to secure development contracts. The sanctions, imposed by the US in 2019, restricted all payments to the PDVSA for US petroleum exports and saw the US freeze $7bn (203.35bn bolivars) of US-based PDVSA assets.

Recently, however, the US has eased some sanctions, allowing companies to negotiate with the new Venezuela oil and gas ministry, albeit under strict terms. Tellechea was appointed in March 2023 to accomplish the same.  

Tellechea revealed that the PDVSA is currently talking with Italy’s Eni, Spain’s Repsol and France’s Maurel & Prom for the gas deals. There are still terms that need agreement before these deals can be realised, he added. Any deals would also need US approval due to the sanctions it currently imposes on Venezuela.

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The country is already in talks with Trinidad & Tobago for the revival of the Dragon offshore natural gas field, the development of which has been stalled since 2020 after the US imposed sanctions on Venezuela.

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In January, however, the US granted a two-year licence to Trinidad & Tobago to develop the project. Dragon sits on the maritime border between Venezuela and Trinidad & Tobago and is estimated to hold as much as 4.2 trillion cubic feet of gas.

The plan for the Dragon field is for a public-private partnership between PDVSA, Trinidad & Tobago’s state oil and gas company, and global oil and gas company Shell, according to Trinidad & Tobago’s energy minister.

Before an agreement is reached on Dragon, the involved parties are relying on the US to alter the initial terms of the licence it granted. Under the initial licence, parties are not allowed to provide cash payments to the Venezuelan Government, nor any of its state-run companies, of which PDVSA is one.

“There are still some changes that need to be made that we are pursuing, but that is always part of very complicated and sophisticated energy negotiations,” stated Stuart Young, Trinidad & Tobago’s Energy Minister.