Eni CEO: Eni can receive Venezuelan oil as payment for gas

Eni CEO, Eni, said that Venezuela is now able to pay for the gas it receives from Eni with oil, thanks to recent U.S. sanctions being eased. This has 'unlocked' a situation where the Latin American nation had a large debt towards the Italian company.

"That is a huge upside. We were stuck in a rut for nearly a year. This led to a significant increase in our outstanding," said Chief Executive?Claudio Descalzi during a call following the results.

Descalzi confirmed that Venezuela owes?around $3 billion to the Italian group. He was referring natural gas from Perla offshore, the only offshore?gas field in Venezuela which is operated jointly by Eni and Spain’s Repsol.

Perla's gas is purchased by Venezuela's?PDVSA, the state-run oil firm. The contract is in dollars.

PDVSA has accumulated billions of dollars in gas payments to Eni and Repsol because it was prevented by sanctions from using the dollar for commercial transactions. Since 2019, the recovery of this money has been slow, intermittent and irregular.

Eni produces crude with PDVSA in the shallow-water Corocoro oil field, where output has been at a minimum since sanctions were implemented in 2019.

Descalzi stated that they were working with American companies to create a joint-venture to "... increase production very quickly".

He added that a ramp-up in production at the two sites would allow Eni more oil to be lifted, which could help it recover more money Venezuela owes the Italian group.

Descalzi stated that Eni would be able to export part of the gas produced by the Perla facility into Europe. This could help replace the liquefied gas supplies previously coming from Russia. (Marianna Parraga contributed additional reporting; Alvise Armellini edited the article. Hugh Lawson was also involved in editing.)

(source: Reuters)