BP, Shell and Gulf partners return to Venezuelan gas on the Trinidad and Tobago border
BP, Shell, and Gulf partners have secured agreements to develop Venezuelan offshore gas fields, including the Loran and Manatee fields. BP, UAE's XRG, and Qatar's UCC Holding will explore the Loran field, while Shell operates the Manatee field. The projects, subject to approvals and sanctions, aim to produce up to 10 trillion cubic feet of gas. Venezuela also signed oil contracts with Hunt Oil, Crossover, and SLB, with estimated investments around $2 billion.
How this was made
The 30-second read
Why it matters
The licences could unlock up to 10 tcf of recoverable gas, expanding LNG supply and offering growth for BP and Shell.
Market read
First major gas licences in Venezuela signal a shift in the country's energy sector, potentially benefiting listed oil majors.
What to watch
Potential political instability and US sanctions risk could affect financing and timelines.
Background
Venezuela is easing isolation, granting new gas licences to major international oil majors after years of sanctions.
Ticker impact
BP was granted an exploration and production licence for the second phase of Venezuela's Loran gas field.
Potential upside for BP shares if project proceeds without sanctions.
The licence adds 4 tcf of gas rights; however execution depends on sanctions and regulatory approvals.
Shell received the first phase licence for the Loran gas field and will develop it alongside BP.
May support Shell's stock if the project moves forward.
First-phase licence covers significant gas volumes; similar execution risks as BP.
Market effects
Highlights renewed foreign investment in Venezuela's gas sector, potentially lifting oil & gas equities.
May improve sentiment for Latin American energy stocks.
Adds to global LNG supply outlook, relevant for commodity markets.
Counterpoint
Sanctions and regulatory hurdles could delay or cancel the projects, limiting upside.
Key entities
- CompanyBP
British multinational oil and gas company.
- CompanyShell
Royal Dutch Shell, a global energy major.
- GovernmentVenezuela Government
Authority granting the licences.
