Venezuela's oil outlook depends on shoring up its natural gas industry, both to enhance crude production and to help stabilize economic and social conditions, market participants said.
State-owned PdV's vice president for exploration and production, Jovanny Martinez, called on Tuesday for more international investment to help Venezuela produce more gas from its aging wells, drill more wells and flare less of its production.
"Reactive your drilling rigs, we need them," Martinez said at a Venezuela E&P conference hosted by the American Association of Petroleum Geologists near Houston, Texas. Operators in recent years have idled many drilling rigs as US sanctions on Venezuela made investment and even buying necessary spare parts difficult. The US' essential takeover of Venezuela's exports this year after arresting former leader Nicolas Maduro has provided a chance to restart the sector.
"Gas is no longer a secondary story," said Oman Oquendo, president of the Venezuelan-American Petroleum Association. Gas development "should have happened 20 years ago … but finally there is a sliver of hope."
Venezuela flares up to half of its gas production of roughly 4 Bcf/d, primarily because of a lack of infrastructure. This has led to shortages for injecting gas into reservoirs for enhanced oil recovery as well as for power generation, domestic industries and even cooking gas, leading to protests at times.
Two gas-infrastructure related accidents in recent weeks have highlighted the state of infrastructure. A PdV worker injured in one of those accidents has died, the company confirmed on Tuesday.
Beyond infrastructure risks, the gas scarcity also creates economic strains.
Venezuelans in remote areas sometimes must pay more than 20 times the official price for LPG for cooking or for gas for diesel generators while Caracas residents tied to the urban gas grid pay almost nothing, Sucre Energy director Nicolas Failache highlighted. A gas pricing regulation created in 2017 before hyperinflation set in means that printing the invoice for pipeline gas billing in Caracas usually now exceeds the bill itself, he said.
Sucre has stakes in two mixed-capital gas companies in Venezuela — Ypergas and Gas Guarico — with output of roughly 125mn cf/d.
It hopes to reactive some drilled but inactive wells in addition to its 12 producing ones. Some plans were held up after PdV stopped funding Sucre in 2019 but payments resumed in late 2024, helping to open the way for more investment.
"We expect that to continue going forward," Failache said.
Venezuela's largest gas-producing asset, Cardon IV, operated with Spain's Repsol, also hopes to reach some mid-term growth in its output of 580mn cf/d by 2028. Long-term growth "is being evaluated", Cardon IV's general manager Gonzalo Carrillo said. Cardon IV has 20 Tcf of technically recoverable resources, with less than 10pc produced so far, he noted.
"There's a lot of work that needs to take place," Carillo said. "But I think a lot of these things will take place during this year."
