Italian oil company Eni is deepening its commitment to Venezuela after signing a new agreement with state‑owned PDVSA to develop the Junin 5 heavy‑oil project in the Orinoco Belt. The deal, announced in Milan on Wednesday, converts Eni’s existing stake into a 25‑year production‑sharing contract, with the Italian firm acting as field operator.
Eni plans to invest roughly $1.5 billion each year alongside PDVSA, targeting a rise in output from the current 12,000 barrels per day to about 400,000 barrels per day by 2030. The company says the project will create value for Venezuela and help recover more than $2.3 billion in receivables that the country owes Eni from decades of oil sales.
Why the move matters
After three decades of operating in Venezuela, Eni faced a stark choice as Washington and Caracas worked to reopen the country’s oil sector to foreign investment. Staying the course, despite political instability, economic collapse and U.S. sanctions, now appears to be paying off. The new agreement aligns with U.S.‑backed efforts to revive Venezuela’s oil industry and could improve Eni’s chances of recouping its outstanding claims.
Barclays analysts note that the deal offers “further opportunities for value creation for the country and for the gradual recovery of outstanding receivables.” Eni’s chief executive Claudio Descalzi said drilling would begin immediately, with the first well slated to start tomorrow.
Broader Venezuelan energy context
Eni also holds a 50‑percent stake in the Perla offshore natural‑gas joint venture with Spain’s Repsol, which owes Venezuela about $400 million. Although U.S. sanctions halted payments, a March pact opened the door to future gas exports, improving Eni’s outlook.
The company maintains a presence in the Corocoro offshore oil field, which has been idle since 2019 due to sanctions, and currently produces about 64,000 barrels of oil‑equivalent per day in Venezuela. Industry sources suggest that production could eventually rise to one million barrels of oil‑equivalent per day.
U.S. policy backdrop
Washington is now pressing Caracas to address its large debt burden. U.S. Energy Secretary Chris Wright indicated that China would have no claim on revenue from fields partially controlled by the United States, potentially limiting Caracas’s ability to use oil income to service Chinese loans.
Eni’s renewed investment underscores the firm’s confidence in Venezuela’s long‑term energy potential and its strategy to secure both future production and the recovery of historic debts.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
