Arab Gulf companies are making their debut in Venezuela through an offshore natural gas project to be operated by BP Plc.
XRG, the investment unit of the United Arab Emirates’ state-owned Abu Dhabi National Oil Co., announced the award of a license for the Loran field, a Caribbean gas deposit that straddles the border between Venezuela and Trinidad and Tobago, the company said in a statement Thursday.
XRG will hold a working interest in the license alongside BP and Qatar’s UCC Oil and Gas Holding LLC to tap over 4 trillion cubic feet of gas resources.
The supply would be positioned to replenish gas feedstock to industries in neighboring Trinidad, including the Atlantic liquefaction plant led by Shell Plc and BP, and petrochemical and fertilizer plants that have been subject to gas rationing for years.
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The Venezuelan gas deal comes at a time when prolonged hostilities between the US and Iran have hampered global energy supplies, including about a fifth of liquefied natural gas shipments that normally traverse the war-choked Strait of Hormuz.
The deal for phase 2 of the Loran development also signals the Venezuelan government’s willingness to advance energy deals negotiated before the US capture of Nicolás Maduro in January. Separate oil deals with state-owned Petróleos de Venezuela SA are also progressing, although at a slower pace and with lukewarm interest by most oil majors.
PDVSA didn’t immediately reply to a request for comment.
At a signing ceremony in Venezuela’s presidential palace on Thursday, US-supported acting President Delcy Rodríguez celebrated the deal for “driving forward gas production.”
XRG’s participation is subject to license and development arrangements, government and regulatory approvals and all international sanctions compliance requirements, the company said.
Adnoc had entered into preliminary discussions to invest in Venezuelan resources after Maduro’s ouster opened possibilities for business. The step widens the Mideast firm’s footprint in the region, following a deal reached with Italian energy giant Eni SpA to buy stakes in an LNG production and export project in Argentina’s Vaca Muerta basin. The company has said it aims to build a global business in gas, chemicals and other energy supply and trading.
XRG’s gas-related interests include Rio Grande LNG in the US state of Texas, the planned Argentina LNG project, Egypt through Arcius Energy, Azerbaijan’s Absheron field and Southern Gas Corridor, Turkmenistan’s Offshore Block 1 and Mozambique’s Area 4 concession.
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