An energy consultant who had worked for Shell for decades has started talks with Venezuela's state oil firm PDVSA to help it reduce gas flaring at oil sites, but the U.S. sanctions on the Latin American country could derail such projects.
Ex-Shell executive Mounir Bouaziz has worked on projects for reducing gas flaring at Shell's operations in Iraq, and now, as an independent energy consultant, he looks to replicate in Venezuela some of the success in cutting gas flaring in Iraq, Bouaziz told Reuters in an interview published on Thursday.
PDVSA alone cannot spare any money to invest in gas processing plants or other infrastructure that would reduce gas flaring at Venezuela's oil fields, where natural gas is also pumped as associated gas but can't be used because of lack of either infrastructure or equipment.
So Bouaziz is looking to attract private investment to repair outdated or broken equipment at Venezuela's facilities. Talks with PDVSA on projects for reducing gas flaring are at early stages, he told Reuters, and he also admitted that the U.S. sanctions could prove a hurdle in talks with potential investors and/or import of equipment into Venezuela.
Over the past decade, the volume of Venezuela's gas flaring-a source of greenhouse gas emissions-has risen while its crude oil production has slumped by more than 50 percent, according to estimates from Reuters and consultancy Gas Energy Latin America.
If Venezuela were processing and selling the associated gas from oil production at market prices, it could get as much as US$1.5 billion in revenues a year, Antero Alvarado, Venezuela director at Gas Energy, told Reuters.
The U.S. government, however, is stepping up pressure on Venezuela's energy industry and it slapped sanctions on a Geneva-based trading unit of Rosneft, saying that the company Rosneft Trading has been helping Nicolas Maduro's regime to evade sanctions and to continue selling oil to keep the regime alive.
Now the U.S. Administration is looking to further increase the pressure on Venezuela's oil industry and exports, and even Chevron's waiver to operate in Venezuela might not be renewed next month.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More