It took me a while to finish the book, Jefferson and Hamilton: The Rivalry that Forged a Nation, by John Ferling. I was fascinated by the tension between Hamilton’s advocacy for a stronger federal government, including in banking and military, and Jefferson's desire to protect the rights of individuals and states. The United States will soon celebrate its 250th birthday, and some of these debates seem to be continuing even centuries later.
Let’s take a look at two energy events from the past week.
Shangyou Nie
Editor, Well Read
Repsol and Chevron Sign First Deals in Venezuela
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Incumbents Repsol and Chevron signed two separate agreements with the interim Venezuelan government and state company PDVSA. These represent two of the first deals to increase oil production in the country after the Trump administration captured former President Nicolas Maduro earlier this year.
Repsol deal details:
According to its press release, Repsol signed a deal with Venezuela’s Ministry of Hydrocarbons and PDVSA on 16 April “to reassume operational control” at the Petroquiriquire oil asset (PDVSA 60 percent, Repsol 40 percent)
The framework agreement between Repsol and PDVSA for Petroquiriquire was signed in 2023.
It was amended in 2024 to incorporate the Tomoporo and La Ceiba fields into the joint venture and extend the joint venture’s duration.
Repsol said that it aims to increase its operated production in Venezuela by 50 percent within 12 months. It hopes to grow from its current 45,000 barrels per day to 67,500 barrels per day.
In three years, Repsol will triple its oil production in the country to 135,000 barrels per day, “provided the necessary conditions remain in place.”
Repsol’s upstream strategy:
Repsol upstream is undergoing a portfolio transformation in preparation for a “liquidation event.”
When strategic investor EIG Partners bought 25 percent of Repsol in 2023, part of the agreement was to divest from non-core countries in preparation for an IPO in 2026 in the United States.
The timing and form of the liquidation event are evolving; it could be a reverse merger, reportedly potentially with APA, instead of an independent IPO.
“We are going to choose the best moments to [take the liquidation step] for this opportunity, because we don’t want to rush,” said Josu Jon Imaz, CEO of Repsol, during the Capital Market Day on 10 March.
Repsol aims to grow its production from 2026 to 2028 to between 580,000 and 600,000 barrels of oil equivalent per day—not yet including upside in Venezuela.
Eighty-three percent of upstream capital will be invested in the United States.
Repsol has 35 percent production (184,000 barrels of oil equivalent per day) in the United States, across Alaska, the Gulf of Mexico (America), the Eagle Ford, and the Marcellus.
Its top production region is Latin America (242,000 barrels of oil equivalent per day), specifically, in Brazil, Venezuela, Bolivia, Peru, and Trinidad and Tobago.
Increase its stake to 49 percent from 36 percent in the Petroindependencia joint venture.
Obtain the development rights to the Ayacucho 8 area in the Orinoco Belt in the Petropiar joint venture (Chevron, 30 percent).
PDVSA will:
Receive Chevron’s operated interest in the offshore Platfaforma Deltana Blocks 2 (60 percent) and 3 (100 percent), with the discovered Loran and Macuira gas fields.
Obtain Chevron’s 25.2-percent non-operated interest in the Petroindependiente joint venture in western Venezuela.
What are they saying:
“This agreement underscores Repsol's commitment to Venezuela, where we have operated without interruption since 1993,” said Francisco Gea Pascual de Riquelme, Repsol’s executive managing director of exploration and production.
“This agreement expands Chevron’s heavy oil position in two key joint ventures in Venezuela and reflects our disciplined development of the country’s significant resources. Ayacucho 8 is a producing asset in close proximity to Petropiar, which enhances development efficiencies,” said Javier La Rosa, president of Chevron’s Base Assets and Emerging countries.
Who’s next?
The agreements follow the General License No. 50A (GL 50A) issued by the U.S. Department of the Treasury’s Office of Foreign Assets Control. Under GL 50A, six companies are allowed to sign oil and gas contracts in Venezuela: Chevron, Repsol, ENI, Maurel & Prom, Shell, and BP. Following the Chevron and Repsol signings, who will be next to sign?
Could it be…
Shell: Chevron’s assets swap might have paved the way for Shell to complete a gas deal with PDVSA, in which several gas fields could be monetized via Shell’s LNG plant in neighboring Trinidad and Tobago.
During CERAWeek by S&P Global, Wael Sawan, CEO of Shell, said a gas-focused FID relating to Venezuela could occur as early as 2026.
ConocoPhillips or ExxonMobil: ConocoPhillips and ExxonMobil were two of the American companies whose assets were nationalized in 2007.
According to Bloomberg, ConocoPhillips sent a team to Venezuela early in April to evaluate investment possibilities.
ExxonMobil also had a team in Venezuela in March.
Mergers and acquisitions continue to drive exploration and production growth for oil and gas companies. At the same time, heightened market uncertainty has led to increased volatility in oil and gas prices, driving significant fluctuations in the share prices of publicly traded companies.
Hear from lead analysts about the latest trends and shifts that are impacting M&A activity and company valuations in this upcoming webinar moderated by Shangyou Nie, 30 April at 9am CT.
BP Adds Exploration Acreage in Namibia and Algeria
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As European oil and gas companies try to refocus on their core strengths in upstream, BP continues to grow its global exploration portfolio. Most recently, the European major acquired three blocks in Namibia and re-entered Algeria.
In Namibia:
On 13 April, BP assumed operatorship and acquired a 60-percent interest from Eco (Atlantic) Oil & Gas offshore Namibia through its joint venture, Azule Energy, with ENI.
Eco will receive $2.7 million.
The three blocks, PEL 97, 99, and 100, are located in the Walvis Basin in Namibia’s north, not in the Orange Basin, where recent oil discoveries were made.
According to Eco, the London- and Toronto-listed junior company will retain 25 percent equity, while state oil company Namcor will hold 15 percent in these three blocks.
BP will carry 100 percent of Eco’s 25 percent of the cost during the first exploration phase until 2028. After that, BP and partners will decide whether to enter phase 2 of the exploration campaign.
The proposed phase 1 program includes conducting a 3D seismic survey of more than 3,000 square kilometers across blocks PEL 99 and 100, as well as processing seismics in PEL 97.
In Algeria: BP Vice President for Exploration Bryan Ritchie posted on LinkedIn that BP signed an agreement with Algerian state agency ALNAFT for an area in the Eastern Basin.
What they’re saying:
“This agreement marks BP’s entry into the country as an operator in Namibia,” said Gordon Birrell, executive vice president for BP’s Production and Operations, through a statement.
“The return of BP to Algeria sends a strong signal of renewed confidence from international investors in the potential of Algeria’s mining domains,” said ALNAFT through a statement.
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