International wildcatter Alex Cranberg, chairman of Aspect Holdings, told President Donald Trump at a meeting with oil executives in January that Venezuela offered a "tremendous amount of opportunity". He tells Argus' Stephen Cunningham how his company's plans there are developing.
Six months on from the White House meeting, how has the investment outlook for Venezuela's energy industry changed?
Many companies, including ours, are making good progress toward obtaining technical data, evaluating investment opportunities and progressing suitable contract terms. There is more to do.
What have your first-hand impressions been of Venezuela's oil sector?
I have been very impressed with the open welcome we have received from a broad cross section of Venezuelans, including government and [state-owned] PdV officials. I have also been very impressed with the quality of technical assessments and situational understanding of the professionals that we have interacted with.
You told President Trump that wildcatters like Aspect can "kick-start" production by moving quickly and taking on early-stage risk. Have you been able to put that strategy into practice yet?
Aspect is certainly one of the earliest players, especially in the "greenfield" exploration role that we specialise in. I fully expect to have contracts in place and investment moving forward in the next several months.
Has the Iran war strengthened the case for investing in Venezuela?
Obviously this is a dramatic illustration of the vulnerability of Middle Eastern energy supplies and therefore of the importance of growing energy supplies in our own hemisphere.
What are you hearing about the impact of the earthquake on Venezuela's energy infrastructure? Could it affect investment plans or project timelines?
The earthquake is an enormous and tragic event. It certainly will both make operations and contract progress more difficult and more essential. We are ourselves turning part of our Venezuelan bandwidth and focusing it on earthquake relief via emergency medical supply.
Some major oil companies are still calling for greater certainty around contracts, dispute resolution and security before investing in Venezuela. Are there specific policy or legal changes you'd like to see in the next 12 months that would unlock significantly more investment?
It is a process, but one that I'm confident will eventually end up in a satisfactory place. I think US government or multilateral provision of political risk insurance would be a major positive. And the US government is the only entity that can in fact provide reasonable cost insurance with little risk and attractive returns to itself… since it controls the relevant revenue stream.
If the investment outlook continues to improve, how much could Venezuela's crude production increase over the next 2-3 years?
I'm not able to make short-term predictions, but I believe that Venezuela could easily top 6mn-7mn b/d in 10-12 years if it provides an accommodative and attractive investment environment.
