Chevron, Eni commit to expand oil projects in Venezuela under US eye

By Timothy Gardner and Vivian Sequera

CARACAS, Sept 2 (Reuters) - ‌U.S.' Chevron, Italy's Eni ​and other ​foreign energy producers committed on Wednesday to major project expansions to boost oil output in Venezuela, in a signing ceremony in Caracas overseen by interim President Delcy Rodriguez and U.S. Energy Secretary Chris Wright.

The deals are separate ‌from a controversial Caracas-Washington deal recently unveiled that gives the U.S. access to 17 oilfields. Most of the ⁠pacts announced on Wednesday relate to project expansions that have been in negotiation with Venezuela's oil ministry and state oil company PDVSA as part of the migration of ‌dozens of energy contracts to new terms ‌under a sweeping oil reform approved in January.

Still, the signings represents the latest effort by private companies with a longstanding presence in Venezuela to help the country revive its struggling oil industry, which currently produces about 1.25 million barrels per day, far ​short of its 3 million bpd peak reached in the late 1990s.

Most oil majors have eschewed major investment in the country for years, retreating after a 2007 nationalization. The industry has also faltered due to lack of investment, mismanagement and sanctions imposed by ⁠the U.S., which is now spearheading a $100 billion investment plan that officials claim will double Venezuela's output in coming years.

"We are trying to work at what I call Trump-speed. President (Donald) ​Trump didn't want a nudge or a slow drift in a positive direction. He wanted to see as fast as possible transformation in Venezuela," Wright said.

Chevron CEO Mike Wirth and Eni CEO Claudio Descalzi also traveled to ​Venezuela for the signing. It was Wirth's first visit to the South ‌American country, where Chevron has maintained a consistent presence in Venezuela even after other oil majors left following the seizure of assets under former President Hugo Chavez.

Chevron plans to invest more than $7 billion to double its ⁠output in the country to about 600,000 bpd over the next five years, part of its strategy of expanding joint ventures with PDVSA.

In addition, GE Vernova signed a power sector alliance, which Rodriguez singled out due to the country's struggles with a large electricity deficit that has left households without electricity for ⁠hours and hobbled key industries.

Venezuelan businessman Alejandro Betancourt was not seen at the ceremony, days after his company NABEP signed the separate deal with Washington ​to gain access to a fifth of Venezuela's oil reserves.

BULKY INVESTMENTS

Eni, which shares an offshore gas project with Repsol and a shallow water oil project with PDVSA, will expand to the large Junin 5 heavy oil area in the Orinoco Belt, where it plans to invest $1.5 billion, industry sources said.

As part ‌of its deal, Eni's current joint venture with PDVSA will transition into a 25-year production sharing contract, the company said in a release.

"What we need is not just signing papers, we need barrels," ‌Descalzi said during the event.

Junin 5 currently produces approximately 12,000 bpd, Eni said in the release. Oil production target from all its oil projects is ⁠400,000 bpd by the end of this decade.

Other pacts ‌include an oilfield development agreement with energy ​firm Primavera and an exploration agreement with Denver-based oil services company Aspect Holdings.

(Reporting by Vivian Sequera, Deisy Buitrago, Marianna Parraga, Tim Gardner, Sheila Dang, Francesca Landini and Julia Symmes Cobb; Editing by Aida Pelaez, David Gaffen ‌and Nathan Crooks)

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