OIL: Oil Companies Show Interest In Venezuelan Sector in the Last Month

High profile companies in the oil and gas industry have sent delegations to Venezuela in the last month according to Bloomberg reports as US sanctions easing opens interest in the country, despite the possibly of measures only being temporary.

• Companies sending delegates include Shell, Repsol, Hungary’s Mol Nyrt, Sweden’s Maha Energy AB, the National Gas Company of Trinidad and Tobago and Bolivia’s state gas company YPFB according to Bloomberg.
• “The companies are generally trying either to secure access to oil and gas fields, rewrite contracts or recover old debts.” according to the reports.
• Snapback US sanctions remain a possibility if Maduro does not fulfil his side of the bargain towards fairer elections – something he is meant to impose by the end of this month.
• The US will be unlikely to want to reimpose them now that Gulf Coast refiners have a new boost in supply of distillate rich crudes in shorter supply this year due to factors such as Russian sanctions.
• “If they don’t take the agreed steps, we will remove the licenses we’ve awarded,” US Assistant Secretary of State for Western Hemisphere Affairs Brian Nichols said earlier in November.
• Venezuelan production of ~800kbd is targeting 1mn bpd in the short term – reportedly dependent on steady diluent supply to help make its crude exportable due to its heavy nature.