Venezuela is continuing its strategy of opening up to major international energy companies. Caracas has granted Shell a license to extract and export natural gas from the Loran offshore field, located off the northeast coast of the country. This decision reinforces the gradual return of foreign majors to a sector long paralyzed by US sanctions and chronic underinvestment.
The Loran field is considered one of the most promising gas projects in the region. It contains approximately 7 trillion cubic feet of gas reserves and extends partially into the waters of Trinidad and Tobago. Shell plans to develop this field in conjunction with the Dragon project, another major Venezuelan field with estimated reserves of nearly 4.5 trillion cubic feet. The objective is to supply the liquefied natural gas (LNG) facilities in Trinidad and Tobago, the main gas hub in the Caribbean.
The return of the major Western studios
Shell's arrival is part of a broader trend that began earlier this year. BP recently signed agreements for the Cocuina-Manakin and Loran offshore fields, while Eni has revived several oil projects in the Orinoco Belt. Repsol has also strengthened its presence in the country following the easing of US sanctions.
Since the reform of the hydrocarbons law, the Venezuelan government has sought to attract foreign capital to modernize an oil and gas industry that has lost much of its production capacity over the past decade. The new provisions allow for greater participation of private companies in energy projects, a major development for a sector historically dominated by the state.
Gas at the heart of the new economic strategy
While Venezuela possesses the world's largest proven oil reserves, its gas reserves remain largely untapped. Many experts estimate that billions of cubic meters remain unused due to a lack of suitable infrastructure and sufficient funding. The development of the Loran and Dragon fields could allow the country to become, for the first time, a significant exporter of offshore gas to regional markets.
For Shell, this license marks a spectacular comeback after several years of withdrawal. The agreements signed with the state-owned oil company PDVSA also cover increased production in certain oil fields in the east of the country, as well as investments aimed at reducing gas flaring. Caracas now hopes that this new wave of foreign investment will contribute to the long-term revitalization of one of the historical pillars of its economy.
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