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After the sanctions relief from the U.S. last month, Venezuela is in contact with domestic and international oilfield services providers to help it ramp up crude oil production, Reuters reported on Monday, citing sources close to the negotiations.
Venezuela’s state-controlled oil firm PDVSA is discussing hiring equipment and services from oilfield services suppliers now that the United States has lifted sanctions on Venezuela’s oil industry after the Nicolas Maduro government reached a deal with the opposition that could see elections held next year.
Some of the international oilfield services firms that have inactive equipment in Venezuela are SLB, Evertson International, and Nabors Industries, according to two Reuters sources.
Still, Venezuela will need years to recover its crude oil production to the levels from before the U.S. sanctions as it needs a lot of investments, analysts say.
Venezuela is expected to raise its crude oil production by less than 200,000 barrels per day (bpd) until the end of 2024 as years of underinvestment and mismanagement will hamper rapid output growth following the effective lifting of most oil sanctions on Venezuela for six months, the U.S. Energy Information Administration (EIA) said last month.
The U.S. has issued a six-month general license until April 18, 2024, temporarily authorizing transactions involving the oil and gas sector in Venezuela. The license will be renewed only if Venezuela meets its commitments under the so-called electoral roadmap, the U.S. Treasury noted.
Venezuela’s crude oil production, at 735,000 bpd in September 2023, per EIA estimates, is unlikely to jump above 900,000 bpd by the end of 2024, the administration reckons. Most of the near-term growth is expected to come from Chevron’s joint ventures, which could raise production to 200,000 bpd by the end of 2024 from 135,000 bpd in 2023, according to the EIA.
Joint ventures operated by Eni, Repsol, and Maurel & Prom could increase production by an additional 50,000 bpd in the near term, according to IPD Latin America cited by the EIA. As a result, Venezuela’s total crude oil production could grow to about 900,000 bpd by the end of 2024.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com