Venezuela’s government has suspended 19 production-sharing agreements with private oil companies, Reuters has reported, citing unnamed sources. The deals are for projects in Lake Maracaibo, the Orinoco Belt, and several mature fields.
The companies operating under these production-sharing agreements include Chinese, U.S., South American, and Venezuelan players, the sources also said.
The agreements would now be reviewed by the Venezuelan and U.S. governments, with some of them possibly ending canceled, the sources also told the publication. The suspension has had no effect on Venezuela’s total oil output, they added.
A month ago, Venezuela’s parliament passed legislative changes to the country’s oil law seeking to attract more foreign investment. Per the new law, private companies “will assume full management of the activities at its own expense, account, and risk, after demonstrating its financial and technical capacity through a business plan” that will be subject to approval by the Venezuelan oil ministry. The ownership of the resources to be developed by private companies, however, will remain with the Venezuelan state.
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