Venezuela signs pacts with Shell to develop Loran gas field

Venezuela signed five agreements ?with ?British oil major Shell on Thursday to advance oil and gas projects, including the company's participation in the coveted 7-trillion-cubic-feet Loran offshore gas field, the government said. Shell had already signed agreements with Venezuela for these projects and others earlier this year. Shell is one of the few large foreign companies to have taken advantage of Venezuelan energy investment opportunities after President Nicolas Maduro was captured by the U.S. in January.

The parties also agreed to a technical alliance that would allow for the expansion of oilfields in Monagas North and the procurement of equipment and parts. The parties also agreed on a technical alliance that would allow for the expansion of oilfields at Monagas North, as well as a separate agreement to purchase equipment and parts in order to reduce gas flaring.

Loran, and another Venezuelan project, the 4.2 TCF Dragon, involving Shell, is expected to enable the South American nation, which has ample offshore gas reserves to develop, to begin exporting its offshore gas. Supplies to Trinidad will be made to process the gas into liquefied gas.

Shell has now moved to the top of PDVSA’s list of key partners, despite having withdrawn from Venezuelan projects and shut down offices.

Delcy Rod, interim president of the United States, said during the signing ceremony broadcast by state television that "we are taking a historic step" in signing this license.

The government stated in a'release' that Shell oil will be able to increase the amount of diluents available to refineries to produce the Merey crude, which is the country’s exportable flagship. According to agreements signed with the Venezuelan Government in April, British BP will also 'participate' in the Loran Gas Field?and the nearby Cocuina Manakin offshore project. Deisy B. Buitrago, Vivian Sequera and Marianna P. Parraga report; Marianna P. Parraga writes; Bill Berkrot, Lincoln Feast and Bill Berkrot edit.

(source: Reuters)