Venezuela signs oil deals with SLB and Hunt Oil

Venezuela signed oil contracts with two U.S. companies on Tuesday in Houston, as the South American nation pushes to attract foreign investment and raise crude production amid surging global oil prices.

Oil Minister Paula Henao announced on state television that Venezuela's state oil company PDVSA had signed a production sharing contract for onshore oil areas with Hunt Oil Co. and a separate alliance with oilfield services giant SLB ↘ 1.21% for reservoir studies. The signing ceremony took place on the evening of August 18, following earlier reporting by Politico that several independent U.S. oil producers were expected to formalize production contracts with PDVSA that night.bloomberg+3

Expanding U.S.-Venezuela Energy Ties

The deals mark the latest step in a rapid expansion of U.S. energy companies' involvement in Venezuela's oil sector. U.S. Under Secretary Haustveit said at a Houston event on Tuesday that about half of Venezuela's oil output now flows to the United States. "In the last couple of months, we're seeing north of 500,000 barrels — approximately half of the production coming out of Venezuela — is coming to the United States to the refineries that were built specifically for that crude," he said, adding that the country is currently producing around 1.25 million barrels per day.reuters

PDVSA has set a target of 1.245 million barrels per day of crude output by the end of August, up from 1.136 million bpd in April. The company also faces a natural gas deficit of 500 million cubic feet per day, underscoring the operational challenges that foreign partners like SLB and Hunt Oil are being brought in to address.scanx+1

Building on Earlier Agreements

Tuesday's contracts build on a series of deals struck earlier this year. In May, PDVSA signed memoranda worth $2 billion with Hunt Overseas Oil Company and Crossover Energy Holding for fields in Anzoátegui, Monagas, and Barinas. In June, SLB signed a long-term agreement with PDVSA to help modernize and revive Venezuela's oil and gas sector, according to Reuters.riotimesonline+1

The engagement between U.S. producers and Venezuela comes against the backdrop of elevated crude prices driven by the closure of the Strait of Hormuz amid the U.S.-Iran conflict, with WTI crude trading above $84 per barrel and Brent above $91. Industry observers noted that contracts with independent producers, rather than majors with legacy claims, suggest a structure closer to service-style agreements under PDVSA ownership — a model Caracas has used before to attract foreign capital without ceding reserves.newsquawk+1