Venezuela has advanced five agreements with Shell to develop the 7-trillion-cubic-foot Loran gas field.
The agreements, signed on June 11, formalize Shell’s participation in Loran, a cross-border reservoir shared with Trinidad and Tobago, while also covering oilfield production expansion and efforts to reduce gas flaring.
The deals build on preliminary agreements reached earlier this year and deepen Shell’s involvement in Venezuela’s energy sector at a time when the country is seeking to increase oil and gas output and attract foreign investment.
“We are taking a historic step by signing this license for phase one of the Loran field’s development plan,” interim President Delcy Rodriguez declared during a signing ceremony broadcast on state television.
In addition to Loran, the parties agreed to establish a technical alliance to support procurement and output expansion at oilfields in northern Monagas. A separate agreement covers the acquisition of equipment and parts aimed at reducing gas flaring.
Loran is expected to play a central role in Venezuela’s offshore gas ambitions. Along with the 4.2-trillion-cubic-foot Dragon project, also involving Shell, the field is expected to help launch the country’s first offshore gas exports, with supplies destined for Trinidad and Tobago for processing into liquefied natural gas.
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The agreements also strengthen Shell’s position among the key partners of state-owned Petróleos de Venezuela, S.A. (PDVSA). The company had previously reduced its footprint in Venezuela but has re-engaged through a series of projects following new energy investment opportunities.
According to the Venezuelan government, oil production linked to the agreements will increase the availability of diluents needed to produce the country’s flagship Merey crude blend and support domestic refining operations.
